Physical Infrastructure: Crosscutting Issues Planning Conference 
Report (01-OCT-01, GAO-02-139). 				 
								 
The nation's physical infrastructure consists of a broad array of
systems and facilities that house and transport people and goods 
and provide services. Among other things, this infrastructure	 
includes transportation networks, including roads, airports,	 
rail, and mass transit; housing; federal buildings and		 
facilities; and postal and telecommunications services. As we	 
move into the 21st century, the following trends are likely to	 
influence the nation's need for interconnected infrastructure	 
systems and services: (1) the total population of the United	 
States is expected to increase by close to 50 million people, or 
about 17 percent, (2) the number of Americans aged 55 and over is
expected to increase by about 60 percent, and (3) the		 
suburbanization of population and employment will continue. The  
steps that the nation takes to accomodate these trends as it	 
plans for and institutes infrastructure related policy and	 
investments in the coming years will have a direct effect on	 
America's economy and quality of life. To better understand these
connections, GAO sponsored a conference on June 14, 2001, to	 
consider a number of infrastructure-related issues from a	 
crosscutting perspective. This conference predated the events of 
September 11, 2001; therefore, the conference did not address the
relationship of infrastructure policy to national security or the
issue of protecting the nation's infrastructure from violence.	 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-02-139 					        
    ACCNO:   A02411						        
  TITLE:     Physical Infrastructure: Crosscutting Issues Planning    
Conference Report						 
     DATE:   10/01/2001 
  SUBJECT:   Airports						 
	     Economic analysis					 
	     Federal facilities 				 
	     Housing						 
	     Mass transit operations				 
	     Postal service					 
	     Quality of life					 
	     Railroad transportation operations 		 
	     Strategic planning 				 
	     Telecommunication					 

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GAO-02-139
     
A

Staff Study

October 2001 PHYSICAL INFRASTRUCTURE Crosscutting Issues Planning Conference
Report

GAO- 02- 139

Preface 1 Challenges Facing the Nation?s Physical Infrastructure 2

Approaches for Addressing Infrastructure Challenges 3 Appendixes

Appendix I: Introduction to Panel 1 by Paul Posner, Managing Director,
Federal Budget and Intergovernmental Relations 8

Appendix II: Presentation by Joseph Coates, President, Joseph F. Coates
Consulting Futurist Inc. 9

Appendix III: Presentation by Anthony Downs, Senior Fellow, The Brookings
Institution 14

Appendix IV: Presentation by Bruce McDowell, Fellow, National Academy of
Public Administration 21

Appendix V: Presentation by Jan Whittington, Independent Planning Consultant
26

Appendix VI: Introduction to Panel 2 by Steve Cohen, Assistant Director,
Physical Infrastructure 37

Appendix VII: Presentation by Robert Dunphy, Senior Resident Fellow,
Transportation, Urban Land Institute 39

Appendix VIII: Presentation by Lawrence Frank, Assistant Professor, Georgia
Institute of Technology 45

Appendix IX: Presentation by David Rusk, Urban Policy Consultant, Former
Mayor of Albuquerque, New Mexico 59

Appendix X: Presentation by Paul Souza, Senior Policy Analyst, National
Governors Association 65

Appendix XI: Introduction to Panel 3 by Bernie Unger, Director, Physical
Infrastructure 71

Appendix XII: Presentation by David Bibb, Deputy Associate Administrator for
Real Property, Office of Governmentwide Policy, GSA 72

Appendix XIII: Presentation by Beth Shearer, Director, Federal Energy
Management Program, Department of Energy 81

Appendix XIV: Presentation by James Sullivan, Director of Capital Budgeting,
Department of Veterans Affairs 86

Appendix XV: Presentation by Steven Weiner, President, Signet Partners 94

Appendix XVI: Introduction to Panel 4 by JayEtta Hecker, Director, Physical
Infrastructure 103

Appendix XVII: Presentation by Edward L. Hudgins, Director, Regulatory
Studies, Cato Institute 104

Appendix XVIII: Presentation by Robert Pepper, Chief, Office of Plans and
Policy, Federal Communications Commission 111

Appendix XIX: Presentation by Dorothy Robyn, Guest Scholar, the Brookings
Institution 117

Appendix XX: Presentation by Nancy Staisey, Partner, PricewaterhouseCoopers
125 Tables Table 1: Higher Education Demand Management: Capital Cost Savings
From Year- round Operation 33

Table 2: Capital Investment Proposal Thresholds 89 Table 3: Comparison of
Weights, 2000- 2003 91 Table 4: Alliances, JVs, and Acquisitions Used to
Expand

Offerings 128 Figures Figure 1: Persistent Population Growth: California?s
Population 1930- 1996 (in thousands) 27

Figure 2: Demand Rises for Operations: Real State Operations Expenditures
1930- 1996 (per capita in 1996 dollars) 28 Figure 3: Local Needs Plateau:
Real State- Provided Local Assistance 1930- 1996 (per capita in 1996
dollars) 29 Figure 4: Capital Outlay Trails Off: Real State Capital Outlays

1930- 1996 (per capita in 1996 dollars) 30 Figure 5: GO Bonds Don?t Pick Up
Slack: Real GO Bond Debt

1930- 1996 (per capita in 1996 dollars) 31 Figure 6: Why Roads Are Crowded
47 Figure 7: Vehicle- Miles Traveled per Capita, 1990, Major U. S.

Urbanized Areas 48 Figure 8: Population Change in the Atlanta Metropolitan
Region,

1990- 1999, by Census Tract 49 Figure 9: High Growth Areas in Atlanta, 1995-
2025 50 Figure 10: Average Distance Traveled to Recreate 53 Figure 11:
Comparing Two Families 54 Figure 12: Neo- traditional Development vs.
Suburban

Development 55 Figure 13: Household Vehicle Miles of Travel, by Mean Block

Area 57

Figure 14: Household NOx Emissions, by Mean Block Area 58 Figure 15: Total
Governmentwide Space Inventory 73 Figure 16: Total Governmentwide Office
Space Inventory 74 Figure 17: Federal Agencies? Real Estate Holdings, in
Thousands of Square Feet 75

Figure 18: Distribution of Governmentwide Space, by Type of Use 76 Figure
19: Fiscal Year 2002 Capital Budget (in millions) 87 Figure 20: Fiscal Year
2003 Criteria Weights 90 Figure 21: Partnership Structure 95 Figure 22:
Federal Center South, Seattle, Washington 97 Figure 23: Federal Office
Building 8 (2nd and C), Washington, D. C. 99

Figure 24: IRS Service Center, Andover, Massachusetts 100 Figure 25: Federal
Office Building, Charleston, South Carolina 101 Figure 26: Key Postal
Players in Position to Be Global Super

Powers 127 Figure 27: The Changing Industry Paradigm 130

Abbreviations

ATC air traffic control CALTRANS California Department of Transportation
CHAS comprehensive housing affordability strategy CIMIS California
Irrigation Management Information System CLEC competitive local exchange
carrier CSU California State University DOD Department of Defense DOE
Department of Energy DOT Department of Transportation DSL digital subscriber
line EPA Environmental Protection Agency FAA Federal Aviation Administration
FCC Federal Communications Commission FDA Food and Drug Administration FTA
Federal Transit Administration FTE full- time equivalent GO bonds General
Obligation bonds GPRA Government Performance and Results Act GSA General
Services Administration HUD Department of Housing and Urban Development ILEC
incumbent local exchange carrier IRS Internal Revenue Service ISTEA
Intermodal Surface Transportation Efficiency Act IT Information Technology
JV joint venture MVPD multichannel video program distributor NAFTA North
American Free Trade Agreement NASA National Aeronautics and Space
Administration NEC National Economic Council OMB Office of Management and
Budget SMARTRAQ Strategies for Metro Atlanta's Regional Transportation and
Air

Quality ULI Urban Land Institute UPU Universal Postal Union USPS United
States Postal Service VA Department of Veterans Affairs

Preface The nation?s physical infrastructure consists of a broad array of
systems and facilities that house and transport people and goods and provide
services. Among other things, this infrastructure includes transportation
networks, including roads, airports, rail, and mass transit; housing;
federal buildings and facilities; and postal and telecommunications
services.

These systems and facilities do not exist in isolation: decisions about
where to build or expand roads affect decisions about housing and vice
versa, and, in turn, these decisions affect the need for and location of
public facilities and communications and energy services. Historically, the
federal government has supported the construction of much of this
infrastructure and helped to ensure the safety of services it provides. It
builds, owns, operates, and maintains federal infrastructure such as federal
buildings, dams, and waterways; financially assists state and local
governments to build, own, operate, and maintain facilities such as roads,
transit systems, and airports; and regulates public works. State and local

governments and the private sector also play significant roles in planning,
developing, and maintaining this infrastructure.

As we move into the 21 st century, the following trends are likely to
influence the nation?s needs for interconnected infrastructure systems and
services.  The population will increase. From 2001 to 2020, the total
population of

the United States is expected to increase by close to 50 million people, or
about 17 percent.  The population will age. From 2001 to 2020, the number
of Americans

aged 55 and over is expected to increase by about 60 percent.  The
surburbanization of population and employment will continue.

These trends hold wide- ranging and varied implications for the nation?s
physical infrastructure. The steps that the nation takes to accommodate
these trends as it plans for and institutes infrastructure- related policy
and investments in the coming years will have a direct affect on America?s
economy and quality of life.

Interrelationships among the nation?s infrastructure systems often have not
been fully considered during the planning and building of infrastructure. To
better understand these connections, we sponsored a conference on June 14,
2001, to consider a number of infrastructure- related issues from a
crosscutting perspective. The conference brought together scholars,
practitioners, and policy experts with a wide range of expertise in physical
infrastructure issues. We grouped the discussion into four panels, which

we organized around the broad themes of infrastructure needs, sustainable
development, federal facilities, and the promotion of efficiency and access
to infrastructure services. Sixteen panelists offered provocative thoughts

on the nation?s infrastructure challenges and opportunities. Their thoughts
are summarized below. The introductions by panel moderators and the full
remarks of the panelists are contained in appendixes I through XX. The

views presented here are those of the panelists and do not necessarily
represent our views. We plan to consider this information in formulating
plans for our future work. This conference predated the events of September
11, 2001, which have fundamentally altered the nation?s consideration of
physical infrastructure issues. Therefore, this conference did not address
the relationship of infrastructure policy to national security or the issue
of protecting the

nation?s infrastructure from violence. Challenges Facing the

Conference participants identified many challenges facing the nation?s
Nation?s Physical

physical infrastructure. Although these concerns varied depending on the
participant?s background, perspective, and area of expertise, the following
Infrastructure common themes emerged:

 The demand for infrastructure services is increasing. In 2000, GAO
reported that, for all communities, the need to build and repair
infrastructure tops the list of growth- related challenges. 1 One conference
speaker asserted that, as the population increases, especially if the
economy continues to expand, there will likely be more demand for
infrastructure services. For example, this speaker predicted

that a rise in population and vehicle ownership would lead to increased
traffic congestion. To address this congestion, new and expanded
transportation networks and technologies may be needed. According to this
speaker, rising incomes will increase demand for air travel. This demand
will likely cause increased airport congestion and may strain an

already troubled air traffic control system. At the same time, this speaker
predicted that increasing numbers of low- income households will live in
cities and older suburbs. This trend could lead to increasing demand for
affordable housing and employment access options. 1 Community Development:
Local Growth Issues- Federal Opportunities and Challenges (GAO/ RCED- 00-
178, Sept. 6, 2000).

 There are insufficient resources to support an aging infrastructure
network. According to conference speakers, investment in maintenance of our
aging national infrastructure has not kept pace with demands. Infrastructure
systems underpin our national economy and require regular maintenance and
replacement as they wear or complete their useful lives. One speaker
explained that, on the state level, inflation, taxpayer revolt, and the
emergence of competing needs have left California?s infrastructure
investment lagging far behind demand.

Another speaker highlighted the fact that the General Services
Administration, which controls approximately 300 million square feet of
federal office space (41 percent of the federal inventory), has a
multibillion dollar backlog in capital maintenance expenditures for its
building inventory. This speaker also maintained that the lack of quality

federal workspace affects the recruitment and retention of workers, which
can exacerbate the workforce planning challenge faced by federal agencies.

 The impact of past federal policy concerning the nation?s infrastructure
should be reevaluated. A conference panelist suggested that such an
evaluation should consider the design, condition, and needs of our public
and private infrastructure network. In addition, speakers raised questions
about the implications of federal policy in several areas, including (1)
whether government funding is meeting the maintenance needs of federal
properties, (2) whether federal regulations are creating barriers to
innovation and economic expansion, and (3) how federal infrastructure policy
and investments might be used to support state

and local quality growth initiatives designed to avoid the negative
consequences of urban sprawl development. One speaker stressed the need for
effective intergovernmental cooperation between federal, state, and local
policymakers to address the dual challenge of managing growth while
maintaining the quality of life in communities nationwide. Approaches for

Conference participants generally agreed that meeting the challenges
Addressing facing the nation?s infrastructure will require concerted efforts
on the part

of the public and private sectors. Again, the approaches that panelists
Infrastructure recommended varied with each panelist?s perspective and area
of

Challenges expertise. At the same time, many of the suggested approaches had
broad

similarities and interrelationships.

Conference participants provided numerous examples of approaches for
addressing the nation?s infrastructure challenges, including the following
themes:  Plan and use existing infrastructure more efficiently. One
panelist noted

that providing incentives for development in areas already served by
infrastructure systems could increase the efficiency of infrastructure use.
Another panelist indicated that taking advantage of available information on
demand for services could help planners more effectively meet growing
demand. Concerning incentives, one speaker suggested that providing tax
credits for housing development in areas with adequate transportation
services could help meet the need for affordable housing while taking
advantage of existing transportation networks. Another approach mentioned to
address demand and

environmental concerns was brownfield development 2 in cities and,
occasionally, in rural areas. Both housing tax credits and brownfield
development were highlighted by panelists as ways to efficiently use
existing infrastructure. In addition, the use of information technology
could facilitate efficient infrastructure investment and avoid oversupply.
For example, a conference speaker indicated that policymakers can

project future demand through the analysis of infrastructure use rates and
thereby efficiently plan the level of new investments. Another speaker
demonstrated decisionmaking software that policymakers can use for
investment priority- setting and aligning investments with strategic goals.
Furthermore, pricing strategies known as demand

management can promote the efficient use of existing infrastructure, as
discussed below.  Incorporate performance management in infrastructure
decisionmaking. According to Fragile Foundations, a report written by

a conference panelist, performance measures are necessary for gauging
infrastructure needs more precisely, maintaining and expanding service
capacity more effectively and efficiently, and supporting a growing and
prospering economy. 3 This speaker emphasized that federal infrastructure
investment and regulations can be monitored and

2 Brownfield development seeks to use abandoned and contaminated industrial
sites for redevelopment following the cleanup of toxic waste. 3 National
Council on Public Works Improvement, Fragile Foundations: A Report on
America?s Public Works, Final Report to the President and Congress
(Washington, D. C.: U. S. Government Printing Office, Feb. 1988).

assessed using the performance measurement requirements under the Government
Performance and Results Act (GPRA) of 1993. According to this speaker,
infrastructure performance is fairly measurable, and GPRA provides the
federal government with the framework for measuring results. Examples of
measurable outcomes of federal programs include congestion time and accident
rates for highway

investments and average delays and elderly/ handicapped access for mass
transit investments.

 Integrate regional planning and intergovernmental cooperation in
infrastructure development. Conference speakers indicated that if the
federal, state, and local roles in state and local infrastructure
development were altered by requiring more regional planning, federal
assistance might be put to better use. According to one panelist,

regional planning such as that embodied in the Intermodal Surface
Transportation Efficiency Act of 1991 and the Transportation Equity Act for
the 21 st Century (TEA 21) of 1998 provides substantial benefits through
intergovernmental cooperation. For example, TEA 21 requires metropolitan
area planning and intergovernmental cooperation on transportation
investments. Such planning considers projects and strategies to enhance
economic vitality, increase safety and security for transportation system
users, protect the environment, and promote energy conservation and quality
of life improvements. One speaker suggested that regional planning and
intergovernmental cooperation

could improve the delivery of housing assistance. Receipt of federal housing
assistance under federal formula grant programs requires jurisdictions to
prepare consolidated plans, including comprehensive housing affordability
strategies- that is, plans for meeting low- income family housing needs. The
speaker suggested that these plans could be made regional in scope and
merged with metropolitan transportation planning to better meet housing
needs by taking advantage of regionwide housing opportunities.

 Encourage alternative approaches to infrastructure development and
maintenance. Because there has been insufficient funding to address the
backlog of federal property maintenance and renovation needs, one

speaker suggested regulations to promote private- sector- like approaches
for property maintenance and renovation. For example, this speaker suggested
that federal agencies could be permitted to keep and reinvest the proceeds
from sales of federal property. Agencies could also be allowed to enter into
lease- with- option- to- buy

arrangements if the Office of Management and Budget would waive or

revise budget- scoring rules that prohibit such arrangements. A different
approach mentioned in terms of federal property was allowing federal
agencies to tap some of their billions of dollars in equity by entering into
public- private partnerships, in which developers would finance the
renovation of federal property in return for a percentage of the cash flow
from the partnership. Another speaker offered a planningoriented

proposal to help state governments address deferred maintenance issues. For
example, this speaker said that life- cycle costing could be promoted by
requiring preparation of maintenance

plans in conjunction with capital outlay plans.  Encourage market- based
decisionmaking in provision of infrastructure

services. Several conference presenters agreed that the historic federal
role in regulating some infrastructure services has been too intrusive and
that encouraging competition through deregulation provides incentives that
foster economic efficiency and innovation. One speaker illustrated the
concept by describing the introduction of competition into the
telecommunications industry, which lowered prices and significantly
increased both investment and the number of wireless

subscribers. Another speaker pointed out that deregulation can lower costs
for consumers, as evidenced by lower prices in many airline markets since
deregulation. A third speaker suggested that time of day (i. e., congestion)
pricing or auctioning of runway takeoff and landing slots would help to
reduce air traffic congestion and flight delays by providing incentives for
more efficient use of airport capacity. 4 Similarly, a fourth speaker
suggested using time of day pricing for access to bridges and tunnels.

The full text of speakers? remarks, each of which represents the speaker?s
positions alone, is contained in report appendixes. If you would like
additional information on this study, please call me on (202) 512- 2834. The
June 2001 conference was planned and this report was prepared under the
direction of Peter Guerrero, Director, Physical Infrastructure. Other major

4 These points are detailed in ?Ending Runway Gridlock? by Dorothy Robyn in
Blueprint: Ideas for a New Century, September/ October 2001.

contributors to this report were William Sparling, Teresa Spisak, and
Alwynne Wilbur. John H. Anderson, Jr. Managing Director, Physical
Infrastructure

Appendi xes Introduction to Panel 1 by Paul Posner, Managing Director,
Federal Budget and

Appendi x I

Intergovernmental Relations Panel 1: What is the state of the nation?s
physical infrastructure; what factors will influence future infrastructure
needs; and how can these needs best be met?

We might dub this panel our foresight panel. A lot of us think of the
General Accounting Office as being in the business of oversight- that is,
overseeing how agencies are implementing laws that the Congress has already
passed. But another important role for us is foresight, helping the

Congress and the public understand how emerging forces in a rapidly changing
society are going to affect the federal role in a lot of different areas,
what choices are presented to us, and how we can inform those choices with
good systematic analysis. In some sense, we have had the luxury in the past
3 years of having risen out of a preoccupation with

deficits to enjoy surpluses, at least for a period. Surpluses can prompt us
to think about how we can position the government to address emerging issues
over the long term, and infrastructure is certainly among the largest of
these issues. We also know that surpluses will soon be overtaken by a
demographic tidal wave we?re all a part of, which makes it important that

our choices today are effective and fiscally sustainable. Today?s panel will
guide us through some of these choices and help us to better understand the
big picture. What are the implications of energy, demographic, economic,
technological, land use, and intergovernmental trends for infrastructure in
general and for the federal role in particular? How do these trends interact
with our values, views of government, and financing issues to shape our
choices?

The remarks of panel 1?s four speakers are contained in appendixes II
through V.

Presentation by Joseph Coates, President,

Appendi x II

Joseph F. Coates Consulting Futurist Inc. Joseph Coates is president of
Coates and Jarret, a futurist research firm. Since 1979, the firm has
consulted with 45 Fortune 500 companies, numerous smaller companies, trade
and professional organizations, and all levels of governments. He is the
former head of exploratory research at the Office of Technology Assessment
and program manager of the National Science Foundation?s Research Applied to
National Needs program. Mr.

Coates has authored over 300 articles, papers, and chapters and is coauthor
of 2025: Scenarios of U. S. Global Society Reshaped by Science and
Technology. He holds degrees from Brooklyn Polytechnic Institute,
Pennsylvania State University, and the University of Pennsylvania and an
honorary doctorate from Claremont Graduate School.

Looking to the Future Thank you. It?s a great pleasure to be here. I?ve
always admired the work

Requires Challenging of GAO. Some people think it has a heavy hand, but
weight is necessary if Assumptions you are to see whether the law and
expectations are being met. I?m going to

talk about some of the things shaping the future of the infrastructure. But
before doing that, let me answer a question that should be on your minds.
Why bother? Bright, intelligent, well- informed people could very well feel
that they?re smart enough to be ready to engage the future as it unfolds.
The problem with that reasoning is that it doesn?t work. There is an
infinite history of failure of that strategy. The point of looking into the
future is not to tell you what will happen or what may, might, or could
happen. That?s at best an instrumentality. The

primary purpose in looking to the future is to help you to understand what
your assumptions are about the future. Remember, the higher you go in the
organizational pyramid, the more socially and culturally isolated you are,
and the less likely it is that anyone will seriously challenge you. You?re
going to persevere in the mind- set that brought you successfully to the
top. In other words, you are going to be continually looking backward and
attempting to reproduce your historic experience.

The purpose of looking into the future is to help jar you into becoming
acutely aware of your assumptions. I?m seeking disagreement, not

agreement. I?m hoping to evoke from you, ?That couldn?t be. No way. What a
nutty idea,? because if you think twice about that, you?ll realize that you
can?t attack a concept about the future without revealing some of your own
assumptions. It?s those assumptions that are worth thinking about.
Demographic Trends Will Let me pick a few themes here. You will recognize
that current and historic Affect the Nation?s Future

practices have led to rigidity; to narrow interests influencing
infrastructure; Infrastructure Needs

to indifference to future outcomes; and to a generally chaotic, limited, and
partial planning for the future of infrastructure. That?s GAO?s problem to
overcome if it is going to be more successful than it?s been in the past in
influencing the future. Let me suggest some of the things affecting the
future of transportation and information. The first thing to consider is
that population growth is clearly in our future. We?re the only rapidly
growing

advanced nation. That?s fundamentally good news for the economy. It means
more clients, more prosperity. It also means more voters. At the same time,
it means new distributions of population and new interest groups. All these
changes have to be integrated into transportation and information technology
infrastructure planning because infrastructure has a minimum lifetime of 50
or 60 years. If you?re only looking out with a decade?s perspective, you?re
going to miss the boat. That?s the only form of transportation I?ll mention.

The second thing to consider is that information technology is now highly
active in business- to- consumer and business- to- business trading,
bargaining, buying, and selling. The consequence of that has to be a large
increase in the movement of goods in relatively small packages around the
country- in other words, an explosion in logistics. Those logistics are
largely going to move through the transportation networks. The third thing
to consider is the growth of tourism and travel. This will rise if we make a
reasonable assumption of 1- 1/ 2- or 2- percent annual growth in the Gross
Domestic Product. You may be more optimistic about that. I don?t want to be
extreme. If this growth occurs, over decades, more people will have more
discretionary money. More discretionary money all

around the world means the same thing. It means more mechanized, motorized
transportation- particularly outside of the United States, as we already
have a lot of it. Second, it means more meat in the diet. Third, it means
more travel. Global and domestic prosperity imply these three increases.

We have a consistent history of federal and local government neglect of
infrastructure. Why do American highways fall apart in 5 years, yet the ones
in Germany last forever? It?s a simple matter of the failure to do two
things that are right down GAO?s alley. One is to enforce the conditions for
the construction of highways, and the second, which is not part of the
federal package but can be mandated, is to be sure that local ordinances are
enforced. You could, before they patched it up a few years ago, go down the
Washington- Baltimore Parkway and feel exactly where the trucks? turnoffs
were, because at those points the road ceased to be a shambles and you had
fairly smooth travel. That situation shows absolute administrative and
technological incompetence. That?s the story of transportation
infrastructure across the United States.

Deregulation is another source of problems. I can?t think of a single
example of deregulation leading to an overall net public gain. Try to fly
somewhere and the airlines will say, ?Technical problem. Had to cancel the
flight.? They are only canceling because they have an under- filled
aircraft. What are they doing? They lie to you. They cheat. They mislead
you. And

what is GAO doing about it? Nothing. There is no significant independent
government analysis of the abuse of consumers by the airlines.

I?m thinking of writing an article entitled ?Hallelujah! Let?s Welcome Back
Regulation.? Look at what deregulation has done to whatever your favorite
sector is. Look at our local telephone company, Verizon. It?s probably the
most disgraceful telecommunications organization in the United States. Where
is government looking at the lousy service that is routine in
telecommunications? Telephone companies used to have information services.
They used to have telephone books. In the last 2 weeks, I?ve called for
information at Verizon three times. Twice, they didn?t have the

number, and they?d never heard of what I was looking for. Decay, rot, and
bad service are coming out of deregulation, and we the people and our
representatives in the Congress need to know why. The Congress can?t correct
the problem unless it knows it exists and why. The primary reason

those things happen is that there?s a failure to treat law and regulation as
social technologies. We know how to deal with physical technology in terms
of anticipating future consequences, but the Congress has been extremely
reluctant to acknowledge that legislation is social technology, and its side
effects and consequences can be simulated, worked out, and anticipated. A
couple of exercises along this line by GAO could be a great eye- opener for
the Congress.

Priorities are set by interest groups in the United States, and,
consequently, present practices are not linked to what could be. Present
practices are limited by what those special interest groups want or will
tolerate. It doesn?t make any difference whether they are liberal or
conservative. It doesn?t make any difference whether they are concerned with
the

environment or higher sales of energy. The narrow interest groups dominate
what goes on on Capitol Hill. GAO has the opportunity to be an alternative,
leveling, even- handed voice, the voice that gives pros and cons on the
concepts in the legislative mill.

Changing Land- use Patterns Land- use patterns are promoting the polycentric
city. Twenty- five years

Affect Transportation Needs ago, you could map Calcutta onto Chicago or
Chicago onto Calcutta. That?s

how universal the internal logic of city structure was. Not today. Today,
what you have is exemplified by what?s going on here in Washington, with
four or five centers of business, even such things as Tyson?s Corner, which
I believe was a car dealership that grew into a business center. You have
Rosslyn. You have Columbia. You have Alexandria and Arlington. You have
places growing up that have all of the functions of the central business
district, except the cultural and governmental functions. Effectively, that
means that all of the traditional infrastructure, which was

built in and out of the central business district, now has to be
restructured into a more spaghetti- like pattern. Another factor to
consider, which doesn?t seem to enter into planning as much as it should,
are the trade- offs between airplanes and car or rail. Some recent research
shows that people

prefer to drive up to about 325 miles. What does that mean for strategies
for light rail, new forms of transportation, short- hop aircraft, and so on?
One needs to understand why people have their preferences and how to deal
with them. In general, one needs to expand the context for thinking about
infrastructure.

I learned just the other day that there?s a plan under way to build a new
airport for Philadelphia. The land is available. It just happens to be 40
miles away from anyplace anyone wants to be. Is there not some

alternative to that kind of madness? Look what?s happened in Denver. The
Denver airport is an absolutely beautiful- horrible place to go. Nobody and
nothing is out there, and, yet, somebody figured it would be a good thing to
move an airport that was 15 minutes from downtown Denver to someplace that
happens to be a fair fraction of a day?s work in travel. When is systemic
thinking going to occur in the design and building of the infrastructure?
Promoting systems thinking should be GAO?s mission.

GAO Should Examine Broad GAO needs to look back at maybe five previous
examples of infrastructure

Infrastructure Issues that had overruns and examine in detail why those
overruns existed- not in terms of what the Congress voted on, but in terms
of what the Congress knew before it voted or what it could have known before
it voted. Then

GAO needs to transfer that lesson back into future consequence analysis and
feedback. I?m not suggesting this is an easy thing to do, but unless we do
it, every bit of the infrastructure in the United States will have shocking
overruns during the next decade or two. We?re talking about overruns that
will have 12 or 13 digits, that may run to a trillion dollars. This
situation

provides a fantastic opportunity for GAO to do good. Public policy in the
Congress is focusing on the short run, the local, and the pork barrel. Pork
barrel has to become a clear, positive, overt element in GAO?s evaluation
and planning. Denial doesn?t do good for anyone. You

folks have to learn how to cope in a positive way with pork barrel. It
doesn?t have to be everybody?s pork, every time. It only has to be fairly
distributed and for the common good. Let me make one last point. The most
critical thing that information technology is doing is making it practical,
and now mandatory, to deal with the total system that one is concerned with.
One can no longer say, oh, yes,

we know all about the system and then ignore most of the factors influencing
it. Information technology makes it practical and necessary to consider all
of the components of whatever infrastructure system you?re

concerned with. I hope that GAO will lead the way by both precept and
practice in doing that as it explores for itself and others the
infrastructure?s purpose.

Thank you.

Presentation by Anthony Downs, Senior

Appendi x I II

Fellow, The Brookings Institution Anthony Downs is a senior fellow at The
Brookings Institution, where he has been since 1977. Before that, he spent
18 years as a member and chairman of Real Estate Research Corporation, a
nationwide consulting firm advising public and private clients on real
estate investment, housing policies, and urban affairs. Dr. Downs has been
an advisor to several secretaries of the Department of Housing and Urban
Development and has authored 20 books and over 460 articles. His recent
books discuss such

issues as traffic congestion, rent control, and metropolitan governance. He
holds a Ph. D. in economics from Stanford University. Demographic Trends
Will My task today is to present information on forthcoming population
changes Affect Transportation

in the United States that will influence how transportation functions in the
first part of the 21 st century and then to show the implications of those
Demands population changes for transportation. Let me begin with the likely
population changes within the next 25 years. The most important change is
that the nation?s total population will rise by at least 48 million people

between now and the year 2020 and by as much as 64 million by 2025. These
estimates are based upon the Census Bureau?s projections before the Bureau
did the 2000 count, in which it found 6 million more people than it thought
were in existence, so if anything, these projections are all low. Americans
have been adding more than one additional private motor

vehicle per human being added to the population since 1980. This means that
the number of private vehicles on American roads will rise immensely in the
future, by at least 48 million by 2020. The second trend is that the

elderly population will grow faster than any other group. Again on the basis
of data projected before the 2000 census results, the population of those
who are 55 and over will rise by 73 percent between 2000 and 2025. People
over 55 make up 21 percent of the total population today but will be

25 percent by 2010 and 30 percent by 2025. In fact, by 2025, there will be
9.5 million more people 75 years and older. This means that older drivers
with limited capabilities may become as big a problem on roads as drunken

drivers are today. Moreover, older drivers will have the political clout to
change the rules to allow them to stay on the roads longer, since no one
wants to stop driving. In contrast, the population of young people under the
age of 18 will grow by only 2 million, or 3 percent, between now and 2010,
but it will rise by 10 million from 2010 to 2025. That means a lower
fraction of all households

will have children than at present, which will mean less public support for
education but perhaps more public support for public transit. Future ethnic
changes in our population will be dramatic. The nonHispanic white population
of the nation, the traditional majority, is now 70 percent of our total
population but will decline steadily to 60 percent by the year 2025. This
majority group will grow only by 6 percent between now and 25 years from
now, compared with a 23- percent growth for the entire population, a 30-
percent growth for African- Americans, and an 88- percent growth for
Hispanics. Hispanics, or Latinos, will rise from 13 percent of the total
population today to 20 percent in 2025.

Looking at the increase in the population from now to 2025, only 19 percent
will consist of non- Hispanic whites, 50 percent will consist of Hispanics,
15 percent of African- Americans, and 16 percent of other groups. This means
that 81 percent of our future population growth will be among groups we now
consider minorities. Because minorities have lower incomes and lower vehicle
ownership than whites, this could mean a slower increase in vehicle
ownership on the one hand and more patrons for public transit on

the other, especially in big cities. But it certainly means that minorities
are going to become much more important in every aspect of our life.

Because minorities have higher birth rates than whites, they will become
even more dominant among younger ages. Today, non- Hispanic whites are 62-ï¿½
percent of all children under 18, but that number will decline absolutely by
2.8 million by 2025. In contrast, the number of Hispanic children under 18
will rise by 9.4 million. As a result, the share of minorities among all
children under 18 will rise from 37. 5 percent today to 49. 4 percent in
2025. That means that half of all children in our schools will be
minorities, mainly Hispanics and African- Americans, especially in big
cities, where they dominate the public schools. Another trend is that the
real income level of the majority will rise enough

to generate rapidly increasing demand for faster travel. People tend to
spend about the same percentage of their income for transportation. When

incomes rise, people move to faster modes. They start by walking, and then
they go to bicycles, and then to buses, and then to motorcycles and
motorbikes, and then to cars, and then to airplanes, because airplanes are
the only way they can get the speed up. The demand for air travel will
escalate dramatically. If the number of passengers carried by American
airlines were to escalate in the future at the same compound annual growth
rate that it did in the 1990s, then the number would increase by 51 percent
by 2010 and by 114 percent by 2020. The demands for air travel will escalate
dramatically, as will demands for car travel and car use in the

developing countries, where people will be moving from buses and bicycles to
automobiles. Another population trend is that in the United States, most
future population growth will occur in the South and the West. The
metropolitan

areas in those regions have been built mostly during the automobile era.
They have much lower central city densities but higher suburban densities
than older cities in the Midwest and East. On the other hand, environmental
resistance to growth is strongest in the west. One of the reasons the South
and West have lower densities is that it takes a long time to build up high-
enough densities to support transit. In fact, anything of value takes a long
time to build up.

Population Growth Will Most population growth will continue to occur through
peripheral Expand Suburban Areas,

expansion of suburban areas, that is sprawl, rather than through rising but
the Poor Will Continue density in central areas, even if the population in
some central cities rises

to Live in Older Core Areas as happened in the 1990s. Although future
infrastructure costs could be reduced somewhat by having more compact growth
replace sprawl, the

cost savings will not be considered worth the losses of benefits by those
who now gain from sprawl.

I just participated in a large- scale study called The Cost of Sprawl 2000,

managed by Bob Rochelle of Rutgers. He and I were the principal authors of
it. We produced a 600- page volume estimating the costs of accommodating all
future population growth in the country between now and 2025 under two
scenarios. One scenario is continued sprawl, and the other is a more compact
form of development. The study estimates that the cost of sprawl would be at
least $250 billion more over that period than the cost of more compact
development. But $250 billion is only $10 billion

a year over a 25- year period, and that is not a very large amount of money
compared with the total cost going into development or the size of our gross
national product. Furthermore, a lot of people believe that sprawl

produces benefits for them. For example, typically, housing prices are lower
if you go farther out. So I think most of the future development will
continue to be in the form of sprawl. There will be a lot of peripheral

growth of somewhat higher density than in the past, and many more poor
people will live in the suburbs.

Population growth will occur in relatively new communities, which means in
newly built dwellings. Because in America we require all newly built
dwellings to meet very high- quality standards, which are expensive, a lot
of

people will not have enough income to live in these newly built dwellings
and, therefore, will not be able to live in new- growth areas. At least a
sixth of the population added will be in that category. This means that
there will be more overcrowding in older core areas and older suburbs
through the more intensive use of existing older dwellings. America will
continue to house many of its poorer citizens in slums, as it has done right
from the beginning of the nation and particularly during periods of high
immigration, such as the period we are in now.

Travel Will Continue to Be What are the implications of these trends for
future transportation Dominated by Automotive activities? The first and most
important is that ground travel will continue Vehicles

to be dominated by private automotive vehicles. Public transit use will grow
absolutely because of more low- income households living in cities and more
minorities without cars. But auto transportation will grow even faster.
Public transit today is such a small share of total movement that even rapid
percentage increases in it will not displace much private vehicle movement
or alter the dominance of cars and trucks. Advocates of public

transit recently have pointed out that public transit use went up something
like 4 percent in the last year, and they say this is a great triumph, that
it was a bigger percentage increase in public transit use than in automobile
use. In percentage terms, that?s true, but the absolute amount of increase
in automobile use is about 20 times larger than the increase in public
transit

use. Outside of New York City, only 2.2 percent of all American commuters
commute by public transit. Public transit mileage is less than 2 percent of
all ground passenger travel mileage. For most Americans, cars are faster,

more private, more comfortable, and more flexible than public transit. The
average commuting time in America for somebody driving in a car is 22
minutes. For somebody taking a bus it?s 36 minutes. For somebody on fixed
rail it?s 45 minutes. So you can?t get American drivers out of their cars
and into public transit by making public transit more attractive. You can

only do it by making driving less attractive, and that means raising the
cost of it through such things as high gasoline taxes, which we refuse to
adopt, or other methods. Public transit will need to become more flexible to
better serve low- density

areas. That should mean more deregulation to end the dominance of transit by
high cost, monopolistic public authorities controlled by unions and
administrators. Smaller scale vehicles and firms that can serve lower
density areas should be encouraged. I do not share the opinion of Mr. Coates
that deregulation is a total failure. I think it has drastically reduced

the cost of air travel for people who want to travel, but it doesn?t make
travel more convenient.

Roadway Traffic Congestion Another result of future trends is that roadway
traffic congestion will Will Continue to Get Worse

inevitably get worse because of the rising use of vehicles by additional
people. I happen to know a lot about the subject because I wrote a book
entitled Stuck in Traffic, which is published by the Brookings Institution.
I believe that rising traffic congestion is an inescapable part of living in
modern metropolitan areas everywhere in the world. Traffic congestion is
essentially a balancing mechanism that enables people to pursue certain key
goals besides minimizing commuting or driving time. Thus, it is a mark of
rising prosperity. There is no solution to increasing traffic congestion.

We can only cause it to rise more slowly. We can?t stop it from rising.
Congestion will encourage more decentralization of workplaces to get jobs
nearer to where people live. It will also encourage more telecommuting. But
tension with poorer workers will rise, since they will be unable to live in
the new suburbs near the new jobs because they can?t afford to live in brand
new housing. In some cities, trucks will be prohibited from entering

certain areas during peak hours, as now occurs in Bangkok. Some areas may
construct separate roadways for trucks only, as is being considered in some
American cities. Congestion in the largest metropolitan areas, those

with strong downtowns, will encourage more people to live near the downtowns
to be nearer to their central- area jobs. But this will be a relatively
small offset to the total increase in population in most dynamic
metropolitan areas.

Hot lanes, or so- called high occupancy toll lanes, to which sole drivers
can buy access during peak hours, may become much more common because they
create at least one lane in which people can move fast during periods of
congestion if they?re willing to pay for it. Hot lanes do not solve the

congestion problem because all of the other lanes remain just as congested
as before. They just let some people move fast while most remain stuck in
traffic.

Air Traffic Congestion Will Another form of congestion will concern air
travel. Congestion at airports Also Get Worse will become a serious
bottleneck limiting the growth of air travel.

Yesterday, it took me 6 hours to go from Chicago to Washington because of
delays caused by weather. We taxied out on the runway, and after we got out
there, the pilot announced that he had known for an hour that there was an
air stop in Washington, but the airline had made him taxi out and put us
there in the heat because they needed the gate for somebody else. There is
already severe congestion in bad weather at major American airports. Major
airports will be unable to handle demands for air travel at peak periods, or
even at all. Bitter conflicts with environmentalists and

local residents concerning the addition of new runways or the building of
new airports will become widespread. In San Francisco, for example, although
there are 264 square miles of water in the San Francisco Bay and the bay is
19 miles wide at the San Francisco Airport, the environmentalists do not
want to allow a 1- mile addition onto the airport for a new runway because
they say it will ruin the bay and cause more noise pollution in the area.

How you feel about this kind of situation where the airlines are frozen
because of local resistance depends on who you are. If you?re somebody who
lives underneath the runway and doesn?t want to hear the noise, you

like it. If you?re somebody who wants to travel more, as I do, you don?t
like it. I think the most sensible solution, more runways at existing major
airports,

should dominate over the construction of new airports. I think that at
O?Hare, at Logan, at all of the other major airports in the country that
have a tremendous amount of transfer traffic, it makes sense to build more
runways. It does not make sense to build another airport 40 miles away.

Limitations on air travel will create some pressure for more fast trains,
but these trains will be tremendously costly. There?s an article in the
latest issue of the Economist that talks about how the new fast trains in
France are so wonderful but cost taxpayers an enormous amount of money. So I
don?t think fast trains will take over much travel at all. Problems
connected with transportation will create more pressure for some type of
regional governance and planning arrangements over land use as well as over

transportation itself. This is already evident. But actual adoption of
regional governance will only occur in areas that believe they are in some
type of growth crisis, as has already occurred in Atlanta, Florida, and New
Jersey. U. S. Citizens Will Continue My last point is that if there?s a
saving grace for our future transportation to Make Choices That

system, it will be the adaptability of U. S. travelers, households, and
firms. Reflect Their Priorities They will modify their behavior in locations
to optimize those goals they cherish most by sacrificing others such as the
saving of time, which they are now sacrificing to attain goals like a wide
range of choices of where to live and work, the ability to make more than
one stop on a trip, etc. Consequently, we will still be able to achieve
quite high and efficient mobility in spite of all the problems caused by
more people and vehicles.

Thank you.

Presentation by Bruce McDowell, Fellow,

Appendi x I V

National Academy of Public Administration Bruce McDowell is a fellow of the
National Academy of Public Administration, president of Intergovernmental
Management Associates, and a certified professional planner. For 12 years,
he was a local and metro area planner in Washington, D. C. His federal
experience includes 24 years with the Advisory Commission on
Intergovernmental Relations and 2 years as director of governmental studies
for the National Council on Public Works Improvement (a congressional
commission). He has worked extensively with metropolitan planning
organizations, which have been mandated by the Congress to coordinate
regional transportation planning. Dr. McDowell holds a masters degree in
Urban Planning from Georgia Institute of Technology and a doctorate in
Public Administration from American University.

Five Recommendations for I?d like to get right to the point with the five
things GAO should do. First, GAO Regarding GAO should put out a regular
report card on infrastructure. I spent 2 very

Infrastructure intensive years working on the National Council on Public
Works Improvement staff. In 1988, this panel on the status of the nation?s
physical infrastructure came out with a report card. We gave the nation a C+
grade

for highways, a C- for mass transit, a B- for aviation, a B for water
resources, and a B- for water supply. Wastewater got a C grade, solid waste
a C-, and hazardous waste a D. I haven?t reassessed these grades myself
since 1988, but the American Society of Civil Engineers has updated it
twice, most recently, I think, this spring. The grades are going down. The

bottom line is that somebody has got to be out there keeping track of this
in a credible fashion. Who better than GAO? GAO is the last government think
tank in this town that remains standing. Everybody else has been abolished.
Thinking has gone out of style, so I hope you do some of it, and I applaud
the big picture part of your agenda. I hope the 10- percent big picture
thinking you can do on top of the 90percent little stuff can make a
difference.

We put out a pretty good report in 1988. The Congress asked for it. We gave
it to the Reagan administration as they were leaving town, and I?m sure it
was shelved immediately. On the theory that it had been shelved, I pulled a
copy off the shelf, and I now present it to you as the agenda for this team.
It?s a big picture version of your topic. We looked at nine categories of
public works, and I think you could do a lot worse than following this
approach and bringing it up to date. The council self- destructed as soon as

it turned in its report. The report was on time and it was under budget, and
we were very proud of that and proud to go out of business. Following that

report, however, the Corps of Engineers got an appropriation from the
Congress for a 3- year follow- up on the report. I went back to my former
agency, the Advisory Commission on Intergovernmental Relations, and the
Corps contracted with us to do some of the follow- up studies.

The major victory we got out of the follow- up studies was Executive Order
12893 in 1994, called Principles for Federal Infrastructure Investments.
That has been picked up by the Office of Management and Budget (OMB) and
made into a new Part III of the Budget Circular A- 11. The original annual
budget guidance is just Part I now. Part II is the Government

Performance and Results Act (GPRA). The new Part III on investment analysis
includes a very timid approach toward capital budgeting for the federal
government, something that GAO has supported for a long time. So

my number two charge to GAO is to keep track of that executive order. I
think there?s some real leverage there for the infrastructure community. It
would be too bad to let it go off into a black hole. The third thing that
GAO should do is to apply GPRA to infrastructure

programs. GPRA is the best thing around. It was embraced by the National
Performance Review very shortly after it was enacted. Agencies didn?t get
the idea that it applied to them until 1997, which was the deadline to
present their first strategic plans to the Congress. You should have seen
the scramble in August, when the drafts were due to OMB, which was the first
time most agencies ever thought of this act and the fact that it might apply
to them. They all assumed it would go away. The Congress got

interested. They did a report card on the agencies. They put it on the

Federal Page. There were only two or three agencies that got better than a
D. Most of them failed. But the fact that a couple of them didn?t fail
showed that it could be done, and every year as the new ones are submitted

to the Congress there?s kind of a rack up. They don?t do the report card
anymore, because they got such heat. But if they hadn?t gotten that heat,
the federal agencies still wouldn?t be looking at it.

I think people now have the idea you?ve got to do GPRA, and I hope you?ll
apply it for all it?s worth in the infrastructure area. The interesting
thing about GPRA is that it gives government a bottom line. Everybody says
that government doesn?t have a bottom line, and therefore, you can?t manage
it. In fact, the bottom line for government is performance for the people.
The infrastructure team is lucky because you look at things that are pretty
measurable compared with an awful lot of other federal programs. If you
can?t apply GPRA, it won?t work. So go out there, tell the agencies they do
have bottom lines. They can manage those bottom lines. Their bottom line

is not profit; it is benefits for the American people. Those benefits can be
measured, and agencies are making considerable progress in doing that. Our
1988 report made an awful lot of the idea of performance. We measured
performance. We ranked performance to the extent that statistics were
available, and that?s what needs to be continued. If there?s no bottom- line
tracking of performance, you?re not going to get there on the goals. There?s
an old saying in management: what gets measured gets

done. Performance measurement is the key to moving ahead. My fourth charge
to GAO is to reevaluate the federal role in infrastructure. I had developed
five illustrations of areas where you could do that. But to save time, let
me just give you one, and then just name the other four so you can fill in
the illustrations from your own reading of the daily newspaper. The first
one is the Interstate Highway Program. Around 1990, the Department of
Transportation declared it to be completed, and said that from then on the
job was maintenance. Well, what was the basic

principle behind the interstate highway system design in the 1950s? It was
very simple: connect every metropolitan area in the country. But then, the
1980 census created 80 new metropolitan areas, and the 1990 census created
about 30 more. And it?s expected that the 2000 census will create another
30. Is the system designed to serve those 140 new metropolitan areas?
Somebody ought to see if the design principle behind the interstate highway
system is still alive or not. I think it might be eye- opening. Joe Coates
made the point that among the first- tier countries, we?re the only

one still growing rapidly. The country is not complete, so how can the
interstate highway system be complete?

My second illustration was going to be the North American Free Trade
agreement (NAFTA), and I won?t try to spell that out too much. But it fits
in very closely to the design of the interstate system. NAFTA creates a lot
more north- south traffic. If you look at the design of the interstate
highway

system, it?s mostly east- west to connect the coasts. We connected things in
our own country. We weren?t concerned about connecting Mexico to Canada.
There wasn?t a unified market at that time. Well, we?re now busily trying to
retrofit without saying that we are doing anything because, of course, the
system is complete. The border crossings don?t work. They are

overloaded, and we?ve got to redesign them. You can go to the other topics I
was going to illustrate- rail mergers, air traffic congestion, and the
nation?s electric power grid- and imagine for yourself out of the daily
newspaper the need to reevaluate the federal role

in all of them. It?s not enough to say we did our job and that we can now

walk away from infrastructure. The fallacy of highly developed countries is
that they forget the basic rule in the underdeveloped countries, which is
infrastructure, infrastructure, infrastructure. You go absolutely nowhere
without infrastructure. We get fat and happy in this highly developed
nation. We say we?ve got the infrastructure we need, and we begin to ignore
it. I agree very much that deferred maintenance is one of the top issues
around. We got started on the issue of deferred maintenance at the National
Council on Public Works Improvement because a book came out from the
National Governors? Association that was entitled America in Ruins. The
Congress said, ?Is that true? I guess we?ll have a commission.? Well, the
commission titled its report Fragile Foundations. We weren?t quite willing
to say

America was in ruins. It didn?t resonate. Everything was still working in
1988. I don?t know if it is today. We got some gloomy comments about that
this morning, and I think I would echo some of them. We are not paying

enough attention to the existing system or what kind of upgrades it needs.
We?ve lulled ourselves into complacency, I think, because we have a pretty
good system. But we will wake up one day after America has fallen in ruins
if you all don?t measure performance all along the way and give some warning
signs.

That leaves me with my last point, which is to push the crosscutting goals
and measures that are called for in GPRA. Nobody else in this town will do
that. GAO is perfectly placed. OMB has walked away from it. The individual
agencies have walked away from it. Anybody who has actually tried to do it
has walked away from it in frustration. Let me make one

practical suggestion. Take a look at local government. Every state in the
nation has enacted a law called the Interlocal Cooperation Act. They?re not
all the same, but every state has one. It says to local governments that
anything you can do by yourself, you can do jointly. Some of the states even
allow you to do it jointly with local governments that are in another state.
And some of them are even so liberal as to say if they can do it and

you can?t, you can do it with them. The point of this is to compare the
Interlocal Cooperation Act with the Joint Funding Simplification Act of
1974. If you look at the history of that act, it said you can do everything
jointly and we?re going to simplify that for

you. But then when you looked at all the simplifications, it was more
complicated than anything you had ever imagined within your own agency,
which is going a long way. It didn?t work. It was enacted for a 5- year
period, and it was used for the first 1 or 2 years. But it was found to be
too hard to

do. It was extended for another 5- year period, and then mercifully allowed
to lapse. It was a great idea, but its implementation was terribly flawed.
The interlocal cooperation that the states have enacted essentially says you
can put the money into a pot and then you can administer it and account for
it as a single pot.

We?ve got a perfect precedent in the federal government, the Single Audit
Act. We certainly don?t have to go back and audit something five times just
because five agencies put the money in. However, for your own accounting
systems, you have to deconstruct the whole project at the end of the year,
divide it back up, and stick it into your old original appropriations pots.
That?s a horrendous hurdle. That?s basically why the Joint Funding
Simplification Act failed. If you?re putting it into the joint pot for a

legitimate purpose, you should not be required to have to break it back out
again. If it?s a legitimate joint purpose, it ought to be audited and
financially reported on its own base. I think we need an interagency
cooperation act that says just do it. Put out some memorandums of
understanding and some models and get a single audit at the end, and
everybody should be happy. The Bottom Line Is

It?s going to take a different kind of federal manager, I think, to work on
Performance for the

some of these partnerships. The federal role is very different than it used
American People

to be. There are not that many things that the feds do by themselves
anymore. Federal managers actually have to become managers of community-
based programs, which entails a lot of consultation and a whole new way of
operating. Instead of micromanaging by going out and getting compliance with
what the Congress passed in its acts, you need to go out and be part of the
community, part of the partnership, willing to collaborate, and willing to
live by the results of the collaboration. I have a handout for you called
?Principles of Consultation.? I also have a handout

for you called ?Principles for Federal Managers of Community- Based
Programs.? The idea is not to just follow the book and make sure that
everyone complies. Instead, the idea is to get in there together and make
the program work. Get some bottom- line performance for the American

people. It?s a whole different approach. Thanks very much.

Presentation by Jan Whittington, Independent

Appendi x V

Planning Consultant Jan Whittington is a planning consultant from San
Francisco, California. Her most recent publication, Building California?s
Future: Current Conditions in Infrastructure Planning, Budgeting and
Financing, was co- authored with Michael Neuman. Her next publication, to be
published

later this year, is entitled Making Room for the Future: Rebuilding
California?s Infrastructure, and is co- authored with David Dowall, an
internationally recognized professor at the University of California at
Berkeley. As a senior planner for Bechtel Corporation for 10 years, she
studied and developed large- scale infrastructure developments- from new
towns to high- speed rail and intermodal port systems- across Asia and the
Americas. Ms. Whittington holds a masters degree from California State

Polytechnic University and is currently pursuing a doctorate in City and
Regional Planning from the University of California at Berkeley.

California and the Federal The topic of this panel holds considerable
bearing on how states manage Government Face Similar

their infrastructure, and let me just say that the apple doesn?t fall far
from Challenges in Managing the tree. On behalf of the Public Policy
Institute of California, a private,

Infrastructure nonprofit organization dedicated to public policy research,
Professor David

Dowall and I have spent the past 2 years studying California?s management of
infrastructure. If you?re interested in our work, our past studies are
available at www. ppic. org.

California?s Investment in Today, I bring you some highlights from our
upcoming publication, Making Infrastructure Has Lagged

Room for the Future. In the post- World War II period, California invested a
Behind Demand great deal to accommodate population growth, and these public
sector investments in education, transportation, and water could be called
the crown jewels of the state. From the 1970s to the mid- 1990s, inflation,

taxpayer revolt, and the emergence of competing needs left state investment
lagging far behind demand. By 1999, the California Department of Finance
estimated the state?s 10- year infrastructure needs at more than

$80 billion. And while higher levels of debt are anticipated- financing
covers the majority of these needs- a sizable gap remains.

I?ll see if I can show you how the gap was created. Population growth and
infrastructure demand go hand in hand. California seems to have

consistently experienced record growth, much of this through immigration
(see fig. 1).

Figure 1: Persistent Population Growth: California?s Population 1930- 1996
(in thousands)

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California?s Operations and Already at 38 million, the state?s population
will climb to 50 million

Local Assistance Spending sometime around 2020. How has California been
accommodating this Have Risen, While Capital growth? This graph (see fig. 2)
shows California state operations? Outlay Spending Has Fallen

spending.

Figure 2: Demand Rises for Operations: Real State Operations Expenditures
1930- 1996 (per capita in 1996 dollars)

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Demand for increased spending for a growing state bureaucracy makes sense,
but what we show here is operations spending per capita. Clearly, state
staffing and the cost of staffing have outpaced population growth. In 1960,
the state consisted of about 22 departments, and today it has 64

departments and 8 agencies. California?s expenditures for operations have
doubled. Evidently, California has also been spending for local assistance
like it?s going out of style. This figure (see fig. 3) shows local
assistance per capita.

Figure 3: Local Needs Plateau: Real State- Provided Local Assistance 1930-
1996 (per capita in 1996 dollars)

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You?ll notice how local assistance spikes in 1978. It?s about a 30- percent
boost from Proposition 13. This proposition had the effect of strangling
cities? and counties? ability to pay for infrastructure services, especially
K- through- 12 education. Since Proposition 13, you can see we?ve reached a
plateau in local assistance. There?s plenty of pork in here too. Now, the
next figure shows that capital outlay spending per capita has trailed off
(see fig. 4).

Figure 4: Capital Outlay Trails Off: Real State Capital Outlays 1930- 1996
(per capita in 1996 dollars)

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This is our smoking gun. Capital outlay spending has trailed off the map.
You can clearly see the post- World War II development boom. You can see
that spending kept pace with the population growth of the ?50s and ?60s. But
for the better part of the last 20 years, we?ve been spending less than $20
per capita on state infrastructure.

Financing Has Not Picked Some of you might be saying that the basic system
has been built, and now

Up the Slack in Capital California is putting it to full use. However, even
if these systems of Outlay Spending

infrastructure were designed with excess capacity in the ?50s and ?60s, we
should all be clued in to the fact that they are reaching the end of their
20 to 40- year designed lives. Some of you are definitely thinking that
California

must be using long- term financing instead of pay- as- you- go financing.
But the General Obligation (GO) bonds haven?t picked up the slack (see fig.
5). California has experienced some increase in bond spending, but it has
not kept pace with population growth.

Figure 5: GO Bonds Don?t Pick Up Slack: Real GO Bond Debt 1930- 1996 (per
capita in 1996 dollars)

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Today?s debt is climbing toward about $700 per capita, but this still
doesn?t compare with the levels of the 1960s. In addition, nearly half of
today?s debt is being spent on K- through- 12 education. I hear more echoes
of Proposition 13 here. In addition, California?s bond ratings are being
strained by the energy crisis. Something had to give. We have growing
population, growing demand for services, and limited resources. Bonded
indebtedness has limits, too. Among other things, the political will
required to bring bonds to a vote seems to be dissuading the state from a
continuous balanced approach to bond spending for capital outlay. Capital
outlay has been squeezed out. If the state isn?t spending commensurate with
population growth, then the gap is growing.

California Needs a Renewed We need a renewed commitment to infrastructure
investment. The state

Commitment to needs to increase funding, but money alone won?t do it. Even
with all of the

Infrastructure Investment funds the state can muster, I don?t think
California can build its way out of

the gap. Limited funds need to be invested strategically within and between
sectors, and state dollars need to become more effective.

I?m going to talk about managing demand, aligning tasks with costs and
benefits, enhanced project delivery, and maintaining investments. As with
all policy options for infrastructure management, the devil is in the
details.

So where possible, I?m bringing you detailed examples. This might seem a
little far from Washington, D. C., and some of these details are at the
county or city level, but I?ll hope you?ll bear with me.

Demand Management Can The best way to understand demand management is in
contrast to a supply

Help California Better Meet orientation. Supply focuses on what to build and
how to build it, taking Its Needs

into account factors such as engineering costs and construction- cost
estimates. In its most egregious form, a supplier orientation says, ?if you
build it, they will come.? This perspective assumes inexhaustible resources.
Demand management focuses on the consumer, on the market for the goods. It
gives voice to clients or users. It?s more planning and

information intensive and assumes that resources are scarce. It looks toward
service reliability, access, and accountability through regulation.

I have some examples here. Regarding urban water demand management, Marin
County has an integrated resource management plan that was put in place in
1992 with a 10- year goal to reduce water consumption by 22 to 32 percent
over 1987 levels. The plan includes conservation policies for

residential users such as low- flow toilets, faucets, and landscaping.
Commercial users are required to meet a water budget, and if they can?t,
they must buy rights to water from other commercial users. At the same

time, the users face an increasing block tariff. Water use is down 16
percent, from 170 to 143 gallons per day. Regarding agricultural water
demand management, water costs for crops as a percentage of total costs
vary. It?s about 5 percent for grapes, 12 percent for cotton, and 36 percent
for pasture. The use of drip irrigation is increasing from about 2. 2
percent in 1979 to about 13 percent in 1994. Underwater Ranch in Ventura
grows

peppers. It switched to drip irrigation and cut its water use by 25 percent.
As it turns out, over- irrigation had fostered the growth of a fungus that
actually decreased yield, so when the ranch switched to drip irrigation, its
yield increased by 50 percent. And who knows what other crops this could
occur with. The Department of Water Resources in California operates the
California Irrigation Management Information System (CIMIS). CIMIS consists
of 100 computerized weather stations across the state. CIMIS costs $850,000
a year to manage, and it generates benefits of $30 million in avoided water

costs. Incentives for conservation are critical for reducing water use. As
soon as you shift to increasing block tariffs, this will result in changing
cropping patterns that reduce water.

Now, I?d like to turn to higher education. Table 1 shows our estimate of the
increase in full- time equivalent (FTE) capacity that would be generated at
the University of California and California State University (CSU) if we
were to switch to year- round education. The University of California would

gain 31, 000 FTEs; CSU would gain 36, 000. As shown in the bottom righthand
corner of the table, the avoided costs would total $3.3 billion.

Table 1: Higher Education Demand Management: Capital Cost Savings From
Yearround Operation

Assignable Increased

square feet Cost

capacity (full- time (full- time

(assignable Total savings

System equivalent)

equivalent) square feet) (in billions)

UC 30,846 140 525 2.27

CSU 35,883 75 384 1.03

Total 66,729 105 471 3.30

The esteemed Anthony Downs introduced the concept of triple convergence in
his 1992 book, Stopped in Traffic. Triple convergence means that any new
supply in the form of roads will quickly be overwhelmed with traffic for
three reasons: travelers shift routes, travelers shift times, and travelers
shift modes. Supply creates its own demand. People choose the path of least
resistance. Downs mentioned a number of demand management tools: intelligent
transportation systems, monitoring traffic, removing accidents, and using
high- occupancy vehicle lanes or high- occupancy toll lanes. I- 5 in
Washington State was able to implement a

range of demand management measures and reduce its vehicle miles traveled by
6 percent. This eliminated 80- million vehicle miles traveled per year.
Telecommuting is another way to reduce trips, but it?s hard to monitor.
Priced parking can encourage shifts to high- occupancy vehicles or transit.
Congestion pricing can be effective. The New York- New Jersey Port
Authority, I believe, has just implemented congestion pricing on tunnels and
bridges entering New York. Transit- oriented development also is slowly
under way. In San Diego, California, the Association of Governments has, for
a regional organization, considerably consolidated power and is implementing
higher densities near transit modes, but this is an exception.

Tariffs Should Be Aligned Now I?d like to talk a little about aligning
tariffs with costs and benefits.

With Costs and Benefits Given California?s apparent lack of will to spend
tax dollars on capital infrastructure, it seems appropriate to revisit the
role of prices. Conventional wisdom suggests that government should foster
the

consumption of merit goods by supplying them without fees. But what are we
to do with a state that cannot cover the full cost of supply when resources
become scarce? Infrastructure pricing could be used to redistribute income,
but in most cases it shouldn?t. Instead, we should be using income
transfers. If this is impossible, we should structure tariffs to ensure
access but charge marginal costs to middle and upper income

consumers. In this day and age, government needs to generate revenues to
cover the costs of services and to provide signals to producers and
consumers that encourage efficient production and discourage
overconsumption. Tariffs should match costs.

I have some principles for pricing infrastructure services: make effective
use of increasing block tariffs to encourage water conservation, and
introduce road pricing to reflect congestion and social costs. Cost recovery
has its limits, and tariffs are usually regressive. Again, prices can be
offset with income transfers and special programs such as lifeline services.
Pricing of higher education should promote access, but tariffs should be
structured to place more emphasis on means testing. These revenue streams
would cover bonds and operational costs, and it?s equally important to cover
life- cycle maintenance costs, a task that requires considerable upfront
planning.

Project Delivery Could Be I have a number of potent examples of enhancing
project delivery in Enhanced California. The first is in planning and
project execution. Santa Clara

County had about 50 miles of highway construction or expansion to do in the
early 1980s. The county went to the California Department of Transportation
(CALTRANS) and said, ?Can you help us out? We?re going to put in a half-
cent sales tax measure over the next ten years. We need to complete the
project within the next ten years to be able to benefit from this revenue
stream.? CALTRANS said it would take about 14 to 23 years to complete the
project. These projects were actually completed in 7 years, but that?s
because Santa Clara County used Bechtel Civil Company to manage the project,
and they coordinated the project with private

contractors and CALTRANS. The county saved $116 million through value
engineering and time savings.

Concerning better information and asset use, in the planning state, the more
we know about how well our assets are being used, the more we can reduce the
estimates of infrastructure needs and the scope of new

development. For example, classrooms are typically underused at the
University of California. The average use level is only 67 percent of
capacity. If all University of California campuses increased their use to
meet our standard of full use, we would generate an additional 800,000
station hours of capacity. This would avoid capital costs of $280 million.

Partnerships Are Another Cooperation and sharing can also work. Last month,
the City of San Jose Good Option

and San Jose State University broke ground on the biggest library
construction project west of the Mississippi. The university wouldn?t have
had the funds to develop a new library on its own. The city built the
library but used university land to do it. I think the Santa Clara County
experience is also a good example of a public- private partnership.

Introducing competition creates strong incentives for cost- effectiveness,
but it is difficult to make competition last. First mover advantages, such
as information asymmetries, can lead to hold up and monopoly positions. For

example, San Diego has a Metropolitan Transportation Board that reviews
contracts to provide bus service in the regions? transportation corridors.
They award contracts for 3- to 5- year periods. The committee that reviews

and awards the contracts includes the unions, the public and private bus
operators, and citizen representatives. About 37 percent of revenue
passenger miles are contracted out to private operators and the remaining 63
percent go to public bus operators. The region?s bus fair box ratio is about
50 percent, which is well above the national norm. Their continual
monitoring of contracts and regular schedule of placing routes up for bids
allows for more sustained competition.

Life- cycle Costing Is Needed Deferred maintenance is the sleeping giant.
Maintenance requires to Address Deferred planning, and maintenance and
capital outlay decisions belong together. Maintenance Each 5- year capital
outlay plan should have a twin in maintenance. We had a hard time finding
any evidence of life- cycle costing, which is really the basis for
conducting maintenance. Asset reporting was dismal. Nobody likes to bother
with record keeping.

In closing, I?ll say that California?s situation is probably familiar to
other states as well. Spending has plummeted. The transition to long- term
financing has been less than smooth, and growth continues. The states?
institutions are filled with routines that are easy to design and hard to
change. Moving to demand management or pricing, to more efficient service
delivery, or to continuous maintenance involves painstaking efforts mired in
details that are actually critical for success. I hope these projects offer
some insight.

Introduction to Panel 2 by Steve Cohen,

Appendi x VI

Assistant Director, Physical Infrastructure Panel 2: How can all levels of
government and the private sector help plan for the infrastructure needs of
sustainable communities? I?d like to welcome you to our second panel of the
day. This panel will continue the discussion about how we as a nation will
meet our infrastructure needs, but it will do so in the context of the
immense challenges of growth and development that we face in the years
ahead. Over the next 50 years, the population of the United States is
projected to increase by 50 percent. That?s over 100 million more people for
whom we?re going to have to provide housing, jobs, schools, water, and roads
and

other transportation systems. In places like California, Texas, Florida, and
the Southwest, there will be growth in the 50- percent range over the next
25 or 30 years. California, during this period, will add to its population
the equivalent of the current population of the state of New York.

To understand the challenges we face, we need only to look at how we faced
the challenges of accommodating growth in the recent past. The last time our
nation?s population increased 50 percent, the amount of driving

we did as measured by vehicles miles traveled increased by about 300
percent. Fueled by economic prosperity, our growth was characterized by
rapid expansion of our metropolitan areas. With that prosperity came not
only traffic congestion, but the consumption of land, open space, and

natural resources to support development; declining air quality; and the
decline of our cities and older communities. It seems that almost overnight
the people of Atlanta woke up to find that their metropolitan area was 100-
miles wide. The people of Denver woke up to find that the mountains and open
spaces they cherished were dotted with townhouses and subdevelopments. And
the people of metropolitan Washington, D. C., found themselves spending the
equivalent of 2 workweeks a year sitting in traffic. Looking at the record
of the past and the challenges of the future, many

communities and observers have concluded that the way we have been growing
is simply not sustainable. The question facing many communities is how do we
accommodate the growth that we know is coming in a way

that is sustainable over the long haul. For example, how do we grow and
improve our road systems while at the same time providing our people with
alternatives to the automobile, such as transit, walking, and bicycling?

How do we target growth and development to places that already have needed
infrastructure, make better use of what we have, and avoid the need for
billions of dollars in new spending? How do we provide the economic
development our people demand while at the same time

preserving open spaces and minimizing the damage to our natural environment?
And how do we do all this and still provide jobs and affordable housing to
millions of Americans? This is the challenge of building sustainable
communities, a challenge that is integral to the discussion of
infrastructure.

This panel will address how all levels of government and the private sector
can meet the challenge of building sustainable communities. In particular,
it will examine how to integrate the multiple players at the local,
regional, and state government levels as well as in the business and other
privatesector

communities. It will also address how to integrate the range of crosscutting
concerns in environmental policy, transportation policy, and housing policy.
The remarks of panel 2?s four speakers are contained in appendixes VII
through X.

Presentation by Robert Dunphy, Senior Resident Fellow, Transportation, Urban
Land

Appendi x VII

Institute Robert Dunphy is senior resident fellow (transportation) in the
policy and practice department of the Urban Land Institute (ULI). He chairs
the transportation and land development committee of the Transportation
Research Board and is a member of the Institution on Transportation
Engineers, for which he is writing a chapter of the new Transportation
Planning Handbook. The research for his latest book, Moving Beyond Gridlock:
Traffic and Development, included case studies of three large regions
recognized for implementing smart growth policies. He also wrote

Transportation and Growth: Myths & Facts, which addresses some of the most
controversial aspects of growth in the context of traffic congestion and
transportation options. Mr. Dunphy frequently speaks on growth and
transportation issues at national and regional meetings. He holds an M. S.
in Civil Engineering from Texas A& M and is a member of Lamda Alpha
International, an honorary land economics society.

Infrastructure Policy Affects I?m going to simplify the charge of this
conference by talking about Land Use

transportation as a primary aspect of infrastructure. Transportation is a
true crosscutting issue relating to a whole variety of different kinds of
travel for people and goods, and it?s delivered by a whole variety of
different units of government as well as the private sector. It also links
to

the issue of land use. It becomes part of the broader dialogue on growth, no
growth, smart growth, or sustainable development. There are conflicting
views. The National Survey on Growth and

Development commissioned by Smart Growth America asked people what they
thought about different strategies. The survey found that 78 percent of
respondents supported giving priority to improving services in existing
communities rather than encouraging new housing and commercial development
in the countryside, sort of obvious good management. Fiftyfour

percent said traffic in the area was getting worse, but when asked what to
do about it, the primary response was to improve public transportation.
About half gave that primary response, twice as many as

said to improve the roads. Similar results were found in an Atlanta poll.
People seem to favor improving transit over improving roads despite the fact
that few of them actually use public transportation. A survey conducted by
the Alliance for Clean Air asked people what the most responsible means of
commuting was for them. People?s response was,

?Well, it?s driving my own car.? Clearly, in this survey, when given an
opportunity to vote for the environment and good government, the respondents
recognized that it was all about them. These studies confirm the linkage
between growth and traffic in people?s minds. There is wide support for
doing something to improve the traffic. There may or may not be support for
greater management of growth.

We know that when it comes to development, the two things people hate most
are sprawl and density. And the disconnect between Americans? apparent
support for improving alternatives to driving and the reluctance to use them
is illustrated by a presumably humorous article in The Onion last year,
which reported that a study by the American Public Transportation
Administration revealed that 98 percent of Americans support the use of mass
transit by others. Developing a Regional Should federal policies support
sprawl or smart growth? Again, that Vision Is Critical to

sounds like an easy question. My take is it probably depends. Decisions on
Effective Transportation

growth are jealously guarded local government responsibilities that Planning

collectively have a great impact on transportation investments of state and
local governments. The survey cited earlier found that while most voters
feel there needs to be more management of growth, particularly because of
the transportation impacts, there is little support for federal or state

intervention. So again, we have one of these contradictory findings.
Developing a regional vision of where the next million people will be or, in
the case of Los Angeles, where the next 6 million people will be, requires
collaboration among local governments and the private sector throughout a
region as well as supporting state and federal policies. Such visions vary
according to local priorities regarding the economy, quality of life issues,

and the environment. As critical as this vision is in determining the need
for regional investments in infrastructure, economic development, and
housing, its importance is not universally understood. In many cases, we
have been driven by transportation planners? decisions and visions. There is
a federally established process for developing consistent transportation and
growth strategies, but it is rarely invoked. One of the few examples was
Atlanta, where a finding that the city?s plans were not in conformance with
clean air requirements created a crisis that led to a business- driven fix,
at least for

now. And while the term ?smart growth? is hot in some places, it is by no
means mainstream. You can talk about smart growth in Atlanta, but you

can?t talk about it in Charlotte. You can talk smart growth in Austin, but
not in Dallas. It seems to me that there are three levels of community
consciousness that can spark successful regional strategies for dealing with
travel and growth. The first level is, ?We have a traffic problem and we
need traffic solutions.? This is characteristic of growing business
communities, such as Houston and Atlanta, because of the critical nature of
transportation and mobility to businesses in these communities. In fact,
both Houston and Atlanta faced a crisis in transportation, and in both cases
the business community led the regional solution. The next level up is, ?We
have a traffic problem and we need traffic and land- use solutions.? This-
smart growth- seems especially oriented toward destination communities, such
as Phoenix or San Diego, that have an important stake in preserving the
quality of life of the place that drew

people there as well as in mobility. In these places, there appears to be
support for light smart growth, which approaches growth management gingerly,
but at least is a start. I think San Diego is a rare example of a

metropolitan planning organization that was given authority to coordinate
regional facility plans mandated by a voter initiative. This type of
delegation of local authority is rarely done at the regional level. I
believe there?s a large potential for such light smart growth with better
planning and community involvement. The last level is the attitude, ?We have
a traffic problem, and we need traffic and land- use solutions as well as a
change in lifestyles.? Livable

communities, such as Toronto, Portland, and Seattle, seem to be candidates
for this kind of deep smart growth, possibly including pricing and
management of parking.

This review of approaches to linking transportation and land development
illustrates the wide range of experience in different metropolitan areas as
well as the degree of comfort or discomfort people have with making

significant changes in current trends. Developing a regional vision is a
first step in transportation planning, but it?s often been dismissed as a
necessary preliminary step to the real work of calculating transportation
plans. Rather than have the forecast generated by a university or a
consultant, as sometimes happens, this visioning exercise should be
recognized as the

origin and most critical determinant of transportation plans. As Paul said,
the question is where are we going to grow, and there are a number of

examples, most recently in Salt Lake and in the Twin Cities, of broad
community deliberations of this question.

One interesting example of the federal government dealing with land- use
issues is the Transportation and Community and System Preservation Pilot
Program. It?s a mouthful. It started under the transportation appropriations
of fiscal year 1999, and the most recent round awarded 80 grants for a total
of $47 million. I understand that the way they came up with this horrendous
title is they started to call it transportation and land use, but that was
entirely too controversial on the Hill. So they went back and did a search
and replace in the legislation and came out with something completely
unpronounceable. This model, by the way, has been followed by other similar
programs. In Atlanta, the regional agency has a livable centers program.
There?s one in the Bay Area in San Francisco, and another in Minneapolis.
Housing and Transportation The cost of affordable housing is an issue that I
think we often don?t Strategies Affect Each Other

appreciate for its linkage to transportation. A significant component of the
and Land Use

traffic growth in recent years is the growing distance between homes and
jobs, which reflects consumers? need to spend more time on the road in
return for affordable housing. A ULI study in Portland, Oregon, found that

for the same size home, new home buyers could save about $2 a day in
mortgage costs for every mile they moved further out, adding additional
congestion to the roads and emissions to the environment. Even a generous
estimate of the cost of driving is maybe 50 cents a mile. So out and back,
that?s an extra dollar against a $2- a- day reduction in mortgage

costs. And most people at that stage don?t even consider fully allocated
costs. They?re probably thinking about the cost of gas.

There is an experimental Location Efficient Mortgage Program being
implemented by Fannie Mae to help redress this balance. Most housing is
provided by the private sector, so it?s important to understand the
strategies to incentivize housing in locations that are efficient in terms
of transportation demand and supply. It may be necessary to offer carrots to
private developers and localities for developing affordable or mixed

income housing in smart growth areas that include adequate transportation.
This approach is being used in Maryland now, in New Jersey, and in a number
of other places. Federal carrots for mixed income affordable housing could
include allowing investors to take losses as they did in the olden days,
increasing tax credit amounts to offset higher land

costs, home ownership tax credits, and higher tax credits for residential
mixed income in these areas. The Millennial Housing Commission is currently
examining the range of housing recommendations under a congressional charge.
The transportation program that most directly addresses smart growth goals
and urban revitalization is the federal transit program. But one of the
challenges is that transit works best in places that are generally not
growing and worst in places experiencing most of the growth, typically

auto- dependent communities in the Sunbelt. Encouraging development within
the existing transit service area is clearly important to its success, but
many of the investments in new transit lines are being undermined by the
lack of local consistency in decisions to reinforce the transit investment.
The Federal Transit Administration (FTA) has implemented criteria to
encourage new start transit communities to make land use changes to support
transit. And, of course, the growing smart growth movement would reinforce
that.

FTA has also changed its rules to encourage joint development, by allowing
transit agencies to keep their revenues from sales or leases of real estate,
which removes one of the major disincentives for a public agency to get
involved in such a high- profile venture. One of the organizations involved

in this rule change was Trimet in Portland, which estimated that with the
capital cost of new rail lines, generating new riders by developing an
adjacent site would be 10 to 23 times more cost- effective, even if the land
were given to a developer. With the cost of new transit investments running
as high as $50,000 per regular daily rider, there?s a strong financial

return from supporting development nearby as well as the potential for
supporting smart growth goals and increasing the livability of the
community. This strategy of investing in places where travel demand is low
and

available sources are high works well on the highway side as well, such as
in some of the places that Larry Frank talked about in Atlanta. Because
these sites often have other challenges, including neighborhood opposition,
the existence of a regional vision and strong reinforcing policies is
essential. Finally, the provision in the financing of parking facilities is
especially essential in in- fill locations. Since parking is needed to bring
development into the types of locations that offer many choices, it might be
considered as a potential public expense. Robert Silverman, a developer in
Atlanta, spoke at a ULI in- fill development forum and pointed out that
since federal and state funds were used for highways and transit, they
should be

available for parking, also. The federally mandated transportation process
requires that all federal transportation investments be consistent with
regional plans. A broader view would align other public policies as well,
including state investments and other areas of development, such as housing,
education, and recreation. I think Governor Glendening is doing this in
Maryland and is encouraging others through that. The principles of ISTEA,
the Intermodal Surface Transportation Efficiency Act, were such good models
that Congressman Blumenauer has suggested that there should be a water ISTEA
built on similar principles of broad regional approaches.

A broader view of transportation decisions recognizes that they are part of
a broad focus on community and livability. This heightened concern of
citizens about the built environment was mentioned at the beginning of the
last presidential campaign but was never really pursued. But it continues to
be an important issue. Even if there is not voter support in having the
federal government involved in local growth issues, there needs to be a
national dialogue, and the federal government needs to be involved. With its
involvement in so many aspects of urban life, federal actions can have a
marked effect, as we?ve seen with the Interstate Highway Act, the Federal
Housing Administration, and the Veterans Administration loans that have
changed the landscape of America since the second World War. As the

Millennial Housing Commission begins its activities, a parallel effort among
the U. S. Department of Transportation, the Environmental Protection Agency,
and the Department of Housing and Urban Development, as a minimum, with an
array of state and local official, civic and business leaders, would be a
timely program. Thank you.

Presentation by Lawrence Frank, Assistant

Appendi x VI II

Professor, Georgia Institute of Technology Lawrence Frank is a faculty
member of the City Planning Program at the Georgia Institute of Technology
and a registered landscape architect. He holds a M. S. in Civil Engineering
Transportation Planning and a Ph. D. in Urban Design and Planning from the
University of Washington. Specializing in the interaction between land use,
transportation, air quality, and health, he has published several papers on
the effects of local land use and regional transportation decisions on
regional development patterns, air quality, and traffic congestion. Dr.
Frank received a multiyear award from numerous state and federal sources to
conduct a study (known as SMARTRAQ) to assess the role of land use and
transportation in improving air quality and public health in the Atlanta
Metropolitan Region. This study will be pioneering in that it will assess
how development decisions and transportation investments affect travel
choice and the level of physical activity as a predictor of overall public
health. The Built Environment

Good morning. I was glad to see you chose Crosscutting Issues as the Affects
Our Behavior and name of this conference because I think we?ve done a really
good job in our Our Health

educational system and in our culture of separating roles and
responsibilities among disciplines to the point that it is as if we had
blinders on. And I think that is responsible for a lot of the problems that
we?re now facing. Obviously, it is efficient for a transportation engineer
to know exactly what makes a highway move the most number of people in a

car, but that knowledge in isolation has led to a lot of costs, in terms of
pedestrian movement, fatalities, the ability to walk, etc. All of these
issues are intertwined. The gist of my talk will be looking at city planning
and health- that is, how the built environment affects our behavior and our
health. Transportation, infrastructure, all of these things are intertwined.
City planning grew out of health concerns, but it grew way out of health
concerns and diverged to the point that I will argue that our current use of
the Zoning Enabling Act to separate uses through zoning has made things so
separate that, in fact, it?s counter to the original impetus upon which this
act was originally predicated. I haven?t written that book yet.

Atlanta Was Forced to To start off, I had to give talks on a project called
SMARTRAQ or Smart Rethink Planning and Growth. I?d moved from Seattle to
Georgia. I?d felt really safe talking about

Development Issues the project in Seattle, but when I moved to Georgia, I
found that growth

management was considered a very scary thing. Then, in 1997, Atlanta faced a
freeze on federal transportation funds- I think it was the first

example in the nation, and I was happy to be there to see it- where the
federal laws came in and gave a lesson to a region on how it needs to
rethink the way it?s growing, developing, and planning for its future
infrastructure. Our regional transportation plan in Atlanta has changed a
lot. The approach to planning for future infrastructure has changed. I?m
happy to report that. On the other hand, I don?t think that the
implementation of that plan has changed very much. The realities are still
there, and I guess that says how far we really have to go. But to a group of
elected officials in

Atlanta, this quote seems to be very effective: ?Change is inevitable. In a
progressive country change is constant.? (Benjamin Disraeli, Edinburgh, Oct.
29, 1861) If we?re going to be progressive, we need to recognize that change
is fundamental. Underneath all that is the way the expectations of the
general public seem to be manifested. Behind the financial and elected

officials? barriers are really the public?s expectations. We have words like
?NIMBYism, LULU, and NOPE- Not On Planet Earth.? Rising Car- use Affects Air
People are most upset by time use, and that?s manifested through their
Quality and Health

frustration over congestion. But air quality, we know, is also affected by
traffic, as is physical activity and health. The linkage between physical
activity and health is new. Our thought process is that if we can?t walk to
places, we won?t be as physically active. And maybe that?s related to why we
are getting a little bit heavier every year, according to statistics that
are now documented by the Centers for Disease Control, which funds some of
this work.

Now, this graphic (see fig. 6) is a 26- year window created by Ann R. Carey
and Sam Ward for U. S. A. Today.

Figure 6: Why Roads Are Crowded

Population growth from 1970 to 1996 grew 30 percent, while doubling that
were drivers, tripling that were vehicles, and quadrupling that were miles
driven. Vehicle ownership is flattening out in our country, but what about
in the rest of the world that?s not?

Bob Dunphy put this next graphic together (see fig. 7) in his book, Moving
Beyond Gridlock. It shows where Atlanta was in 1990 in terms of vehicle
miles of travel per capita. We thought we were so far out in the lead that
nobody would ever catch up, but in 1995, Houston passed us.

Figure 7: Vehicle- Miles Traveled per Capita, 1990, Major U. S. Urbanized
Areas

Miles per day

Source: Robert T. Dunphy, Moving Beyond Gridlock, Urban Land Institute,
1997.

Thirty- five miles of travel per capita per day translates into a graphic
not to scale. But if you think about how far we actually travel in 1 day in
a region, we travel the distance to the sun. If you multiply 35 miles by 3
or 4 million people now in Atlanta, we actually are now on our way back home
for a return trip every day. That is astronomical, literally and
figuratively. Do we really need to drive that much? One of the themes in the
last panel was monitoring and tracking performance. In this arena, there are
tangible

ways we can do that. This graphic (see fig. 8) shows the last 10 years in
Atlanta.

Figure 8: Population Change in the Atlanta Metropolitan Region, 1990- 1999,
by Census Tract Population Change

Loss 0 to 500 501 to 2,500 >2, 500

Source: Atlanta Regional Commission.

Where did the growth go? You can see that the population changed. The dark
areas are where most of the growth went and the lighter areas are where the
population did not grow, or even shrank. The next graphic (see fig. 9)
explains why Atlanta might be driving so much. It?s pretty clear that we?re
exploding out. As Paul said, we?re 80 miles east- west, and 120 to 130

miles north- south. An incredibly rapid rate of expansion occurred over the
last 10 years, as the graphic shows.

Figure 9: High Growth Areas in Atlanta, 1995- 2025

Transportation Approaches Many factors are contributing to Atlanta?s growth.
But I believe regional Affect Development

and federal approaches to transportation and infrastructure investment are
number one. The provision of freeway access to outlying areas in Atlanta has
been amazing, and for the last 20 years, they?ve been trying to put in an
outer perimeter beltway. That doesn?t seem to be a way to go if you want to
contain and reduce outward growth. It?s safe to say that maybe that?s not a

good idea. Provision of freeway access is obviously going to contribute to
growth, and then there?s the issue of the induced demand that would come
from that. Georgia 400 was built in the late 1980s or early 1990s. The
population of

Alpharetta, which is a city to the north, exploded right where the darker
colors are in figure 9. I hypothesize that Alpharetta probably wouldn?t have
grown as fast at the region?s edge without the provision of Interstate
Georgia 400. Lack of accounting for environmental and social costs is really
also at the core of that decision. When we make our transportation
infrastructure decisions, we?re not doing a good job of including in the
costbenefit

scenario things such as health, secondary impacts of land development,
consumption of raw lands, and so on. Auto- dominant modeling regimes. That
is a very technical term, but the fact is that when we collect travel data,
which is what the SMARTRAQ Project is about, we don?t do a good job of
collecting data on travel patterns other than vehicular- based travel. Most
MPOs in the nation tell people when they fill out their surveys not to worry
about the short trips. In fact, they throw out the short trips, which are
what we want to know about to understand where transit might work. So we?re
working on using GPS

devices and Palm Pilots so that in a travel survey, we can track with
technology exactly what the actual behavior of people is instead of relying
on self- reporting. To date, all of the data we have on travel are
selfreported, and we don?t really know what people do. I just did my own
travel survey. I happened to have been recruited, and I have to say it?s
difficult to remember every single thing you do throughout a day. So this
may help. This auto- dominant modeling regime is very important because we
don?t have data to understand the relationships, nor have we been collecting
data across a wide range of urban forums. Another thing we?re trying to
address is that when we do household travel surveys, typically, we capture

households located in the lower density environments. That?s mostly what we
have now. And we don?t know enough about higher density

environments or how people who live in these environments relate to the
environment or travel.

Lack of geographic barriers in Atlanta. Obviously that?s a foregone
conclusion. Limited economic value of land for agricultural use is another
one. I want to convert it if I can make money on it another way. Ethnic and
cultural diversity is also very much a catalyst for outward growth.
Competition for tax base occurs in Atlanta, which has several small

governmental units. Atlanta has everything going for it to make it want to
sprawl. The state constitution mandates home rule for urban land use. Having
learned our lesson with the Clean Air Act, how are we projecting growth to
go in the future? Well, in this graphic (see fig. 9), you can see that the
outlying areas, again, are the ones with the color hits. Most of the

growth continues to go to the outlying areas, requiring more infrastructure
investment to serve that growth, because the levels of service are projected
to be so low on those freeways that we?ve just recently built or are
planning to build that we better get out there and add some more lanes.

Correlation Between Moving into the physical activity and health discussion,
we did a simple Housing Age and Distance little cross- tabulation. We
compared travel data in Seattle in 1996 with the

to Recreate May Help year in which the houses of the people in the survey
were built. Then we Explain Why People

looked at how far people drove to recreate (see fig. 10). Recreate Less

Figure 10: Average Distance Traveled to Recreate

Mean DISTANCE (miles)

9 8 7 6 5 4 3

Prior to 1947 1947 to 1962 1963 to 1977 After 1977 Year of Home Census Tract
Development

Source: 1996 Puget Sound Transportation Panel

It?s amazing. Survey respondents averaged around 3.7 miles to recreate if
their house- their neighborhood- was built before 1947. Before World War II
is what we typically talk about in the literature. And you can see, as you
live in a newer and newer community, you drive almost three times as much
just to recreate. In terms of cost, that suggests that you may be less
likely to recreate. Recreation is not as easy to get to. When we try to
communicate this, we say let?s compare a couple of families: one in town in
Atlanta- I borrowed this picture from Toronto,

because Atlanta didn?t have a picture that looked like that- and one in an
outlying area (see fig. 11).

Figure 11: Comparing Two Families Profile of Family A

Profile of Family B (Urban)

(Ex- urban)

8 units per acre DENSITY

1 unit per acre Parking is limited

PARKING parking on site

services nearby MIXED USE

no services within walking distance family of four

HOUSEHOLD SIZE family of six

annual income $50,000 INCOME

annual income $90,000 one vehicle

VEHICLES three vehicles

four vehicle trips/ day TRIPS

eleven vehicle trips /day 46 miles of travel

MILES OF TRAVEL 101 miles of travel

We talk about things we can compare, like density. These are measurable
things that can be performance- based. We can also track with geographic
information systems as we?re doing now these phenomenon of urban

forum, land use, transportation, travel choice, vehicle emissions per
household, and physical activity levels, too. And we can correlate all of
that if we think crosscutting in our research design will help us to make

policy recommendations based on what people really do and how healthy people
are who live in different environments. In terms of the two families, we
could make the assertion that the one in the outlying area takes more trips
in this environment and that they actually travel more. And these are

data based on Atlanta from 1991. Well, that?s true, but they also have more
people, they have more money, and they have more vehicles. So we need to be
thinking about the controls and how we compare the two. Neighborhood Design

Frank Speilberg drew this next graphic a long time ago (see fig. 12). I?ve
Affects Transportation used it constantly. The suburban sprawl versus the
traditional Choices neighborhood.

Figure 12: Neo- traditional Development vs. Suburban Development suburban
sprawl

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