APTA | Passenger Transport
October 25, 2010

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Challenging Times for Public Transportation
BY SUSAN BERLIN, Senior Editor

These are tumultuous times for public transportation and the road ahead is uncertain. Representatives from public transit agencies, Federal Transit Administration (FTA), and Congress, as well as vendors, provided varying outlooks on the future during a session titled “State of the Industry—Where Do We Go from Here?” at APTA’s Annual Meeting.

Paul Smith, executive vice president, sales and marketing, for New Flyer, noted that the number of bus bids—and the number of vehicles produced—reached a peak in 2008. “We’re in for tougher times ahead,” he said, adding that the slow economy has meant reduced operating budgets for many public transit systems, which responded by cutting service.

Stanley J. Rosenblum, division vice president for Jacobs, laid out what he considers positive and negative trends affecting public transit. The good news includes market stability resulting from pre-2009 contracts and orders; the availability of American Recovery and Reinvestment Act (ARRA) funds to “keep the pipeline flowing”; and federal policies and programs, such as positive train control and sustainability initiatives, that help drive opportunities in the private sector.

However, Rosenblum continued, there’s a bad side to many of these good efforts. ARRA grants support construction, not planning or design; constrained public budgets may mean delays in contract awards; and resources are becoming scarcer, meaning that less will be left after existing large commitments.

He noted that the industry must become more “agile,” consolidating or realigning its assets as needed to stay active. “We will be stronger and smarter when the upturn comes,” he said.

Phillip A. Washington, general manager of Denver’s Regional Transportation District (RTD), gave a brief overview of the agency’s comprehensive FasTracks program. This “very aggressive” multimodal effort, funded through a sales tax increase approved by voters in 2004, includes light rail, commuter rail, bus rapid transit, park-and-rides, and renovations to Denver Union Station.

“The problem we’re seeing is a decline in the sales tax in the economic downturn,” Washington said, adding that RTD had hoped to complete FasTracks by 2017. “Right now, there’s a $2 million deficit if we are to complete the program. Our questions are: should we build to the level our revenues can support, or ask for additional money?”

He also noted that RTD is one of three U.S. public transit systems participating in the federal Public-Private Partnership Pilot Program through one component of FasTracks: the commuter rail Eagle P3 project.

“The private sector provides up-front cash and gets paid back later. We could not do this project without the help of the private sector,” Washington said.

Matthew Welbes, FTA executive director, reviewed recent federal efforts including $776 million in State of Good Repair discretionary grants; $50 billion in front-loaded infrastructure funding proposed by President Obama; and the possible establishment of transportation finance pools to offer funding for large projects ($50 million and up), such as Denver Union Station and the San Francisco Transbay Terminal.

An ongoing concern Welbes cited was the proliferation of funding programs: FTA had nine of these programs in 1982 and 33 in 2005. He said FTA is looking for ways to streamline and simplify the grant process.

Joyce Rose, Republican staff director to the House Transportation and Infrastructure (T&I) Subcommittee on Railroads, Pipelines, and Hazardous Materials, stressed that this is a “particularly difficult period” for Congress to craft a six-year transportation authorization bill. “The usual payment source is the gas tax,” she explained, “but people are driving less, so we’re taking in less—receipts are going down.” She said she would like to see a more innovative funding structure, noting that private-sector support can provide substantial power behind public funds.

Rose emphasized that T&I Ranking Member John Mica (R-FL) “believes in investing in transit” and is committed to working with Chairman James L. Oberstar (D-MN) to craft, then pass, the authorization bill.

Sharon Greene, president/CEO of Sharon Greene and Associates, Laguna Beach, CA, moderated the session.


Panelists, from left, include Paul Smith, Stanley J. Rosenblum, Phillip A. Washington, Matthew Welbes, and Joyce Rose.


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