Under New Management

Traffic congestion has crossed the line in Atlanta. It has become a burden that affects the more than 4 million people in the metropolitan area, particularly those who commute. Take Hal and Alison Schlenger, for example. Picking up their son from school is a continual challenge.

“It’s impossible for either of us to get there in time without altering our schedules,” Hal said. “The congestion is controlling people’s lives. You don’t go to certain places during certain times of the day. And, it’s getting worse.”

Alison is a student at Emory University in midtown Atlanta. If she leaves campus at 4:30 p.m., it takes her more than one hour to drive to her son’s school less than 15 miles away. And the later she leaves, the longer her commuting time becomes.

When it’s Hal’s turn, he tries his best to leave his midtown office before 4 p.m.

“If I leave at 3 p.m., it only takes 25 minutes,” he said. “If I can’t get away until 4:30 or 5 p.m., the same drive takes more than an hour.” On the days he arrives at his son’s school early, Hal waits and works from his car.

A pioneering study by the Georgia Department of Transportation (GDOT) could change that. The Metro Atlanta Managed Lane System Plan study has the potential to identify an interstate network system that could make the Schlengers’ lives—and the lives of many other Atlanta commuters—much easier.

Its goal is to preserve mobility during peak traffic hours by guaranteeing a posted-speed ride. To achieve that goal, the study is looking into the possibility of adding approximately 275 interstate miles—or 1,100 existing lane-miles—of managed lanes. Ultimately, the study will coalesce information into a master plan for a unified, innovative network of managed lanes that would provide motorists with transportation options and ensure free-flow mobility.

Initial cost estimates suggest these improvements could be in the neighborhood of $30 billion, making the collective network one of the largest, most ambitious and most innovative initiatives in Georgia’s history. Recent Georgia legislation that allows private developers to invest in surface transportation projects just might put that price tag within reach.

Losing ground

Budget shortfalls, Atlanta’s poor air quality, a growing population and a phenomenon called “latent demand” all contribute to Atlanta’s traffic congestion.

GDOT always had kept pace with Atlanta’s congestion until a population explosion in the mid-1990s made it nearly impossible to continue that record. Rapid growth—and the resulting spike in auto emissions—contributed to the region’s designation of nonattainment with the Environmental Protection Agency’s Clean Air Act. As a result, Atlanta was not permitted to build any capacity projects until it had a plan for conformity.

Air quality is not the only obstacle standing between motorists and shorter commute times. Federal gas-tax revenues are not keeping pace with demand, creating financing shortfalls that prevent departments of transportation across the country from delivering critically needed projects. However, with SAFETEA-LU’s passage, these public agencies could be at a turning point. This breakthrough federal legislation encourages DOTs and others to find innovative solutions that go beyond traditional funding mechanisms.

Finally, like many Sun Belt states, Atlanta is a victim of latent demand, fueled by a dramatic population shift. According to the U.S. Census Bureau, 143 million Americans will live in Southern states in 25 years. With traffic growing at nearly 8% annually on its busiest corridors, Atlanta cannot build its way out of congestion. Traffic eventually will fill in any newly created road. Widening the urban corridors on which the Schlengers travel becomes a temporary fix. And, at costs that could approach $100 million per mile for multilane urban construction, it also is too costly.

Luv the HOV

With no simple answers to Atlanta’s congestion, GDOT turned its attention to the city’s high-occupancy vehicle (HOV) lanes, introduced in 1994 prior to the city’s hosting of the 1996 Olympic Games. To save motorists time and reduce air pollution, these lanes grant free access only to vehicles with two or more passengers, certified alternative fuel vehicles, motorcycles and emergency vehicles. All other vehicles attempting to use the HOV lanes are subject to fines.

Currently, Atlanta has nearly 100 miles of HOV lanes. Commuters who live in the northern suburbs and work downtown estimate the managed lanes trim their one-way commutes by 15 to 20 minutes. Hal said he and Alison use the HOV lanes as often as they can, but those lanes do not extend far into the suburbs yet.

Giving back mobility

Given the success of the HOV lanes, GDOT wanted to expand the concept. Because so many public agencies face the same challenges GDOT does, there is a national trend to emphasize investment in managed lanes. With its Metro Atlanta Managed Lane System Plan, however, GDOT is at the forefront of a study that will evaluate a wide spectrum of lane management techniques, including pricing, eligibility (e.g., by occupancy, vehicle type, etc.) and access control: HOV2+, HOV3+ and HOV4+ lanes These managed lane forms are predicated on occupancy requirements and would limit access to vehicles with at least two, three and four passengers, respectively.

HOT lanes (including HOT2+, HOT3+ and HOT4+)

High-occupancy toll (HOT) lanes offer access, for a fee, to vehicles that do not meet minimum HOV occupancy requirements. HOT lanes maximize highway system efficiency by “selling” unused capacity in HOV lanes.

ETL

Express toll lanes (ETL) drop the occupancy requirement altogether. While these lanes derive the greatest revenue, they often grant free access to buses and other public transit vehicles.

TOL

Truck-only lanes (TOL) divert truck traffic away from passenger car lanes, enhancing safety and reducing wear and tear on older highways. Truck lanes represent a very new concept, and associated policies have yet to emerge.

TOT

Truck-only toll (TOT) lanes are a subset of TOL. Truckers in these lanes pay a fee to bypass congestion and save time. There are no truck-only toll lanes in the U.S. at present, but Georgia’s study into their feasibility has many other states watching with interest.

Although TOT lanes offer time-crunched truckers a faster route, the concept has some detractors. Atlanta is the freight hub of the Southeast, and many truckers oppose a mandatory scenario by which they would be required to pay a fee to use the lanes.

To assess the viability of TOL/TOT lanes in Georgia, GDOT awarded HNTB Corp. an assignment to conduct a Statewide Truck Lanes Needs Identification Study. The study looks at where truck lanes would be warranted, the access they should have, what policies would be needed to enact them, where and when they should be built and the costs involved. Results of the study will be out in late 2007.

The leading edge

As with anything new, getting elected officials and the public to understand and support the idea of innovative managed lanes takes time.

“The managed lanes concept is a tool that will help us derive the maximum benefit from our existing system at a time when right-of-way acquisition and construction costs are skyrocketing,” said Georgia Transportation Commissioner Harold E. Linnenkohl. “Convincing policy makers, stakeholders and, especially, the driving public that this will work and how we can use it will certainly be a challenge.”

GDOT is working with numerous public officials and other stakeholders to educate them about the innovation behind managed lanes and to establish overarching policies to support system delivery. One of those policies came in the form of groundbreaking legislation.

Georgia goes private

An innovative system of HOV lanes always had been part of GDOT’s overall strategic plan. But, due to lack of funding, system-wide implementation had been designated as a long-term goal. The delivery of several key projects was still decades away. That changed with the passage of unprecedented public-private state legislation in 2003 and 2005. Now the public agency can actively solicit proposals—and accept unsolicited proposals—from the private sector. Access to private dollars is allowing GDOT to accelerate its plan to guarantee commuters congestion-free rides in the emerging managed lane system.

In some states, agreements between public agencies and private developers are called public-private partnerships, or P3s. In Georgia, they are public-private initiatives, or PPIs. Despite the difference in nomenclature, the concept is the same. PPIs leverage private dollars to help budget-strapped public agencies deliver critically needed surface transportation projects decades before public funding would be available.

Every PPI project is different. In some cases, where funding gaps can be bridged over a traditional 30- to 35-year time frame, toll revenue bonds, Transportation Infrastructure Finance and Innovation Act (TIFIA) loans and the like are sufficient to craft a workable finance plan. In this model, PPIs are primarily design-build projects where the developer helps secure financing. Likewise, the up-front equity investment required by the developers can be relatively small.

While revenue from tolling can provide a continuous funding stream, in some cases it may be insufficient to bridge a funding gap over a 30- to 35-year finance window. In these cases, private developers can structure feasible, long-term financial plans and are given an opportunity to truly invest in a project from the very start. Now, they can offer to front every dime; in return, the handcuffs are off. They get to operate the facility for a predetermined time—often up to 99 years—and they get to keep what they earn. This approach is commonly referred to as the concession model. Some owners have shown a reluctance to enter into concession models. Even though the private sector is, in many cases, capable of providing the capital necessary to make these projects a reality, some owners and elected officials view it as bad business to relinquish the later-year revenues. In response, a new hybrid model of concession, predicated on tiered or banded profit sharing between the public and private sector, has emerged.

Within the universe of public-private partnerships, a government agency can contract with a private company—or several private companies—to complete the project life cycle from concept, design, planning and financing to construction, completion, maintenance and facility management. These activities typically are bundled into contract packages, reflecting the public agency’s objectives. In Georgia’s case, one goal of the Metro Atlanta Managed Lane System Plan is to identify the most efficient and effective managed lane system approach. From that, GDOT will consider various implementation and project delivery methods, including PPIs. To date, GDOT has received four unsolicited proposals from national developers.

Financing will vary from project to project and may include a blend of state general funds; federal dollars; toll-revenue bonds; TIFIAs; Grant Anticipation Revenue Vehicles; and, GDOT hopes, FTA New Starts funds.

One of those proposals, the I-75/I-575 Northwest Corridor project, has moved into the development phase, although the blend of financing options and the type of managed lanes have not been determined.

Facilitating PPIs

Without private investment, GDOT could not have afforded to construct a managed lane system in Atlanta quickly enough to meet demand. Now, with PPIs, it can. While the managed lane concept was attracting interest from several developers, GDOT wanted to avoid having the system constructed in a piecemeal fashion. The innovative Metro Atlanta Managed Lane System Plan will ultimately become a strategic footprint for updating the regional transportation plan—essentially directing what happens in all corridors and setting in place the architecture and recommended schedule for the complete system build-out.

Before it got too deep into any one project, GDOT sought an overall advisor—a general engineering consultant (GEC)—that could help facilitate its PPIs. GDOT chose HNTB.

Having a GEC fulfill the role of PPI facilitator is a growing trend in surface transportation. The GEC can act, as HNTB has, as an extension of the public agency’s staff, working side by side in developing and negotiating PPIs. A GEC also can lend private-party thinking to planning, strategy and implementation goals, enhancing the agency’s position to actively solicit PPIs according to an overall strategic plan. GECs can provide input on various public-private financing options, as well as help to structure financing plans for individual projects.

By the end of 2007, GDOT will achieve its goal of creating a strategic, unified and systematic master plan for implementing the Metro Atlanta Managed Lane System. The comprehensive master plan will define funding, outline appropriate policies, calculate the network’s anticipated cost and revenue potential, determine points of access and designate the limits of each managed lane.

“Congestion can be beat,” said Linnenkohl, “if we have the courage to make difficult decisions and the will to use innovative programs like managed lanes and public-private initiatives whenever we have the appropriate opportunities.”

With GDOT’s landmark master plan, Atlanta can develop a managed lane system that guarantees mobility for Atlanta commuters, such as Hal Schlenger, who welcomes alternatives to the daily traffic tie-ups.

Schlenger said, “I am in support of Atlanta doing almost anything to improve transportation.”