Service Provider Collaboration: Coordination of Infrastructure Investments

MTPA Annual ConferenceJuly 15, 2011

The Bigger Picture

• Creating success through shared outcomes

• Infrastructure: key component of success

• Collaboration: key to quality infrastructure

Our shared outcomes

Economic Prosperity

Desirable Communities

Reliable, QualityInfrastructure

AttractiveEnvironmental

Assets

Fiscally Sustainable

Public Services

Access to Jobs, Markets,

Services, and Amenities

Interdependency of the outcomes

Interdependency of the outcomes

DesirableCommunities

Economic Prosperity

We’re working toward our shared outcomes

How will our work be used?

• Connect our actions to outcomes• Direct the wise use of limited resources• Create certainty, predictability

and reliability• Build rationale and support for

tough decisions

What’s SEMCOG’s part?

• Focus our work on the shared outcomes• Evaluate and prioritize the measures• Engage others in ‘signing on’

Example activities

• DWSD “New Normal” planning• Transportation congestion management• Local government assistance• HUD sustainability grant• Infrastructure collaboration

Creating a Sustainable Infrastructure System in

Southeast Michigan

Goals

• Quality infrastructure that is fiscally sustainable

• Quality infrastructure that supports the region’s economy

Three parts to the approach

• Description of the problem• Components of the solution• Action steps

Description of the problem

• Rate/revenue base is declining• Current revenue is inadequate to

maintain infrastructure we have• Underinvestment results in an increased

cost, not a savings• Revenue formulas and policies are

outdated

Water sales Detroit Water and Sewerage Department

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009300

350

400

450

500

550

600

Avg

. mill

ion

gallo

ns p

er d

ay

Source: The FOSTER Group

Michigan gasoline sales 1994-2009

Source: MDELEG, Michigan Energy Appraisal reports 1996-2009

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 20093,800

4,000

4,200

4,400

4,600

4,800

5,000

5,200

Mill

ions

of G

allo

ns

Impact of new fuel economy standards on gas tax revenue

Southeast Michigan

20102011

20122013

20142015

20162017

2018201

92020

$0

$50

$100

$150

$200

$250

$300

$350

$400

Tax Revenue w/current fuel economy Tax Revenue w/new standards

Ann

ual R

even

ue (i

n m

illio

n)

Yearly percent change in home price, SEV, and taxable value

Southeast Michigan

Source: SEMCOG

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

-25%

-20%

-15%

-10%

-5%

0%

5%

10%

15%

-10.8%

-6.7%

Home Values SEV Taxable Value

Description of the problem

• Rate/revenue base is declining• Current revenue is inadequate to

maintain infrastructure we have• Underinvestment results in an increased

cost, not a savings• Revenue formulas and policies are

outdated

Transportation need vs. revenueSoutheast Michigan

Total Transportation

Need$2.8 billion

per year

Revenue Shortfall

$1.5 billion per year

Revenue Available

$1.3 billion per year

Unit costs are increasing DWSD water

Average Day in FY 2003-04 Average Day in FY 2010-110

500,000

1,000,000

1,500,000

2,000,000

2,500,000

Dai

ly c

ost o

f pro

vidi

ng w

ater

Source: The FOSTER Group

Description of the problem

• Rate/revenue base is declining• Current revenue is inadequate to

maintain infrastructure we have• Underinvestment results in an increased

cost, not a savings• Revenue formulas and policies are

outdated

We're under-investing…Changing pavement condition

Good Fair Poor0

10

20

30

40

50

60

70

80

200420052006200720082009Pe

rcen

t of L

ane

Mile

s

…and it’s costing us Pavement Management Funding Needs

2004 2008$0

$500,000,000

$1,000,000,000

$1,500,000,000

$2,000,000,000

$2,500,000,000

$996 million

$2.35 billion

Description of the problem

• Rate/revenue base is declining• Current revenue is inadequate to

maintain infrastructure we have• Underinvestment results in an increased

cost, not a savings• Revenue formulas and policies are

outdated

We’re on a collision courseRevenues require

consumptionPolicies require

conservation

Description of the problem

• We have more than we need, so we must right size

• Constrained fiscal resources are not temporary

• Region’s fiscal capacity is still declining• Our needs and expectations of service

drive costs

Description of the problem

• We have more than we need, so we must right size

• Constrained fiscal resources are not temporary

• Region’s fiscal capacity is still declining• Our needs and expectations of service

drive costs

Description of the problem

• We have more than we need, so we must right size

• Constrained fiscal resources are not temporary

• Region’s fiscal capacity is still declining• Our needs and expectations of service

drive costs

Description of the problem

• We have more than we need, so we must right size

• Constrained fiscal resources are not temporary

• Region’s fiscal capacity is still declining• Our needs and expectations of service

drive costs

Components of the solution

Restructured revenue collection systems

Reduce costs Collaboration amongst providers

Strategically invest funds to maximize all

infrastructure performance

Legislative Strategy

Holistic view of needs and outcomes

Proposed action steps Collaboration amongst providers

• Implement pilot project to serve as model•Seek formal agreement to cooperate from

service providers•Identify specific areas of cooperation:

Maintenance/asset management; etc.

•Emphasize cost savings

Infrastructure Collaboration Summits

Structure for collaboration

• Bring local governments, transportation agencies, and private utilities together

• Share planning process• Disclose project plans• Promote early and ongoing coordination

Summit agenda

• Regional context• Service provider presentations• Sample project lists• Group discussion of how coordination

can be improved

Summit agenda

• Regional context• Service provider presentations• Sample project lists• Group discussion of how coordination

can be improved

• How and when are projects identified and prioritized?

• What factors drive your decision-making process?

• What data informs these decisions (e.g. Asset Management rating of pavement condition)?

Identifying & prioritizing projects

Project timing

• Is project selection an annual process or do you plan for multiple years?

• What time of year does project selection occur?

• What time of year does budgeting for these projects occur?

• How are emergency needs addressed between budget cycles?

Addressing emergency needs

• How are impacted parties currently involved in the planning process or informed of project decisions?• Other service providers• Neighboring communities

• Does existing coordination/collaboration take place before project decisions are made or afterward?

Coordination with other organizations

• What is working or not working with the current coordination/collaboration process?

Strengths & weaknesses of current process

• Information improvements – what is being shared

• Communication improvements – how it is being shared

• Other ideas

How process can be improved

• What are the benefits that your organization would derive from improved coordination /collaboration?

Outcomes/benefits

Summit agenda

• Regional context• Service provider presentations• Sample project lists• Group discussion of how coordination

can be improved

Project list

• Project Name• Project Limits• Proposed Work

– Project type (transportation, water, etc.)– Work Type (repair, new, maintenance, etc.)

Project list

• Jurisdiction• County/Community• Fiscal Year • Start/End Date

Project list

• Grade• ROW• Contact information

Summit agenda

• Regional context• Service provider presentations• Sample project lists• Facilitated discussion

Facilitated discussion

• Is the information on the sample lists useful? What other information is needed?

• When does this information need to be known to make it most useful?

• How should we collect/distribute this information regionally?

Facilitated discussion

• Is this type of collaboration helpful?• How often should collaboration occur

and when?• Who else should be involved?• How can we communicate better with

our customers/constituents?

Positive feedback

• Useful; conduct at least annually• Interaction among agencies• Support for sharing project lists

– Update annually– Contact information most important

Potential outcomes

• Centralized information– Service areas and contacts– Project lists

• Regular meetings• Network of communication• Written agreements among major

providers

More information

• Infrastructure report … http://www.semcog.org/SustainableInfrastructure.aspx

• Collaboration summit … http://www.semcog.org/infrastructuresummit.aspx

• Jennifer Evans– evans@semcog.org– 313-324-3306