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TRANSPORTAT ION RESEARCH BOARD WASHINGTON, D.C. 2011 www.TRB.org T R A N S I T C O O P E R A T I V E R E S E A R C H P R O G R A M TCRP REPORT 144 Research sponsored by the Federal Transit Administration in cooperation with the Transit Development Corporation Subscriber Categories Public Transportation â¢ Finance Sharing the Costs of Human Services Transportation Volume 1: The Transportation Services Cost Sharing Toolkit Jon E. Burkhardt WESTAT Rockville, MD Richard Garrity RLS & ASSOCIATES, INC. Dayton, OH Kathy McGehee Raleigh, NC Susanna S. Hamme Falls Church, VA Karen Burkhardt Cindy Johnson MOBILITAT, INC. Green River, WY David Koffman NELSON\NYGAARD CONSULTING ASSOCIATES, INC. San Francisco, CA
TCRP REPORT 144, VOLUME 1 Project G-09 ISSN 1073-4872 ISBN 978-0-309-15535-9 Library of Congress Control Number 2011920877 Â© 2011 National Academy of Sciences. All rights reserved. COPYRIGHT INFORMATION Authors herein are responsible for the authenticity of their materials and for obtaining written permissions from publishers or persons who own the copyright to any previously published or copyrighted material used herein. Cooperative Research Programs (CRP) grants permission to reproduce material in this publication for classroom and not-for-profit purposes. Permission is given with the understanding that none of the material will be used to imply TRB, AASHTO, FAA, FHWA, FMCSA, FTA, or Transit Development Corporation endorsement of a particular product, method, or practice. It is expected that those reproducing the material in this document for educational and not-for-profit uses will give appropriate acknowledgment of the source of any reprinted or reproduced material. For other uses of the material, request permission from CRP. NOTICE The project that is the subject of this report was a part of the Transit Cooperative Research Program, conducted by the Transportation Research Board with the approval of the Governing Board of the National Research Council. The members of the technical panel selected to monitor this project and to review this report were chosen for their special competencies and with regard for appropriate balance. The report was reviewed by the technical panel and accepted for publication according to procedures established and overseen by the Transportation Research Board and approved by the Governing Board of the National Research Council. The opinions and conclusions expressed or implied in this report are those of the researchers who performed the research and are not necessarily those of the Transportation Research Board, the National Research Council, or the program sponsors. The Transportation Research Board of the National Academies, the National Research Council, and the sponsors of the Transit Cooperative Research Program do not endorse products or manufacturers. Trade or manufacturersâ names appear herein solely because they are considered essential to the object of the report. TRANSIT COOPERATIVE RESEARCH PROGRAM The nationâs growth and the need to meet mobility, environmental, and energy objectives place demands on public transit systems. Current systems, some of which are old and in need of upgrading, must expand service area, increase service frequency, and improve efficiency to serve these demands. Research is necessary to solve operating problems, to adapt appropriate new technologies from other industries, and to intro- duce innovations into the transit industry. The Transit Cooperative Research Program (TCRP) serves as one of the principal means by which the transit industry can develop innovative near-term solutions to meet demands placed on it. The need for TCRP was originally identified in TRB Special Report 213âResearch for Public Transit: New Directions, published in 1987 and based on a study sponsored by the Urban Mass Transportation Administrationânow the Federal Transit Administration (FTA). A report by the American Public Transportation Association (APTA), Transportation 2000, also recognized the need for local, problem- solving research. TCRP, modeled after the longstanding and success- ful National Cooperative Highway Research Program, undertakes research and other technical activities in response to the needs of tran- sit service providers. The scope of TCRP includes a variety of transit research fields including planning, service configuration, equipment, facilities, operations, human resources, maintenance, policy, and administrative practices. TCRP was established under FTA sponsorship in July 1992. Pro- posed by the U.S. Department of Transportation, TCRP was autho- rized as part of the Intermodal Surface Transportation Efficiency Act of 1991 (ISTEA). On May 13, 1992, a memorandum agreement out- lining TCRP operating procedures was executed by the three cooper- ating organizations: FTA, the National Academies, acting through the Transportation Research Board (TRB); and the Transit Development Corporation, Inc. (TDC), a nonprofit educational and research orga- nization established by APTA. TDC is responsible for forming the independent governing board, designated as the TCRP Oversight and Project Selection (TOPS) Committee. Research problem statements for TCRP are solicited periodically but may be submitted to TRB by anyone at any time. It is the responsibility of the TOPS Committee to formulate the research program by identi- fying the highest priority projects. As part of the evaluation, the TOPS Committee defines funding levels and expected products. Once selected, each project is assigned to an expert panel, appointed by the Transportation Research Board. The panels prepare project state- ments (requests for proposals), select contractors, and provide techni- cal guidance and counsel throughout the life of the project. The process for developing research problem statements and selecting research agencies has been used by TRB in managing cooperative research pro- grams since 1962. As in other TRB activities, TCRP project panels serve voluntarily without compensation. Because research cannot have the desired impact if products fail to reach the intended audience, special emphasis is placed on dissemi- nating TCRP results to the intended end users of the research: tran- sit agencies, service providers, and suppliers. TRB provides a series of research reports, syntheses of transit practice, and other support- ing material developed by TCRP research. APTA will arrange for workshops, training aids, field visits, and other activities to ensure that results are implemented by urban and rural transit industry practitioners. The TCRP provides a forum where transit agencies can cooperatively address common operational problems. The TCRP results support and complement other ongoing transit research and training programs. Published reports of the TRANSIT COOPERATIVE RESEARCH PROGRAM are available from: Transportation Research Board Business Office 500 Fifth Street, NW Washington, DC 20001 and can be ordered through the Internet at http://www.national-academies.org/trb/bookstore Printed in the United States of America
CRP STAFF FOR TCRP REPORT 144, VOLUME 1 Christopher W. Jenks, Director, Cooperative Research Programs Crawford F. Jencks, Deputy Director, Cooperative Research Programs Lawrence D. Goldstein, Senior Program Officer Tiana Barnes, Senior Program Assistant Eileen P. Delaney, Director of Publications Natassja Linzau, Editor TCRP PROJECT G-09 PANEL Field of Administration Lyn Hellegaard, Missoula Ravalli Transportation Management Association, Missoula, MT (Chair) Barbara K. Cline, West River Transit Authority, Inc., Spearfish, SD Daniel T. Gowdy, Hope Network West Michigan, Grand Rapids, MI John H. Johnson, Mississippi Valley State University Mass Transit, Itta Bena, MS Robert S. âScottâ Kosky, OATS, Inc., Springfield, MO Beldon Ragsdale, Idaho Transportation Department, Boise, ID Rosie Sanford, Loxley, AL Shmuel Z. Yahalom, State University of New York Maritime College, Paramus, NJ Doug Birnie, FTA Liaison Tina Hodges, FTA Liaison Christopher Zeilinger, Community Transportation Association of America Liaison Jennifer A. Rosales, TRB Liaison AUTHOR ACKNOWLEDGMENTS The research that produced this report was performed under TCRP Project G-09 by Westat, with the assistance of RLS & Associates, Inc.; Mobilitat, Inc.; Nelson\Nygaard Consulting Associates, Inc.; Kathy McGehee; and Susanna S. Hamme. Jon E. Burkhardt, Senior Study Director at Westat, was this projectâs Principal Investigator. Mr. Burkhardt of Westat and Richard Garrity of RLS & Associates were the key authors of this report. Other authors of selected sections included consultants Kathy McGehee and Susanna Hamme; Karen Burkhardt and Cindy Johnson of Mobilitat, Inc.; and David Koffman of Nelson\Nygaard Consulting Associates, Inc. We would like to thank many people for their substantial contributions to this project. We are grate- ful for the assistance provided to us by the members of our project panel. We appreciate the time and insights given to us by the many governmental officials and human service and public transportation operators who worked with us in many phases of this project. C O O P E R A T I V E R E S E A R C H P R O G R A M S
TCRP Report 144 provides a comprehensive analysis of issues and effective solutions for identifying and sharing the cost of providing transportation services for access to commu- nity-based human services programs. It examines current practices and offers strategies for collecting necessary data, addressing administrative and policy-related issues, and establish- ing cost allocation procedures. Building on this inclusive process, the report develops a Cost Sharing Model that facilitates local coordination and service delivery. The report is presented in several documents. First, a detailed description of the compo- nents of a comprehensive Cost Sharing Model is contained in Volume 1, The Transporta- tion Services Cost Sharing Toolkit. This description leads the user through the process of setting up the necessary cost accounting system, identifying the data requirements and the measurement parameters, and describing procedures for applying the model. This volume concludes with instructions for using the actual Cost Sharing Model. The second product of the study, as reported in Volume 2, is the Research Report which summarizes all of the study components that contributed to formation of the Toolkit. It includes an extended evaluation of current experience and describes the regulatory environment that frames transportation service delivery requirements. The third component of the study is contained on the attached CD-ROM and includes the actual Cost Sharing Model along with instruc- tions for setup and application. This is an Excel-based model that is easily usable by all lev- els of community transportation providers. The need for this study grew out of historic recognition of the difficulties associated with accurately measuring costs incurred in providing transportation services to improve mobil- ity, employment opportunities, and access to community services for persons who are transportation-disadvantaged. Recognizing potential benefits of coordinated, cost-effective human service transportation programs is easy. Establishing procedures to accomplish this goal, however, is not. The approach used in this study addresses the specific steps necessary to establish a uniform cost accounting system: defining the required data, identifying sources of that data, and framing cost accounting procedures for meeting necessary accounting principles. The output of this effort is an analytical model that can be applied in numerous situations facilitating establishing cost sharing agreements among multiple ser- vice providers in a given community environment. The primary audience for this study and the Toolkit is community transportation providersâthose funded by The U.S. Department of Transportation or through other fed- eral programs. This report provides instructions on how to record and calculate costs and then how to allocate these costs to other participating agencies based on the proportion of costs incurred by each partner. Another target audience is community transportation plan- F O R E W O R D By Lawrence D. Goldstein Staff Officer Transportation Research Board
ners and administrators, including individuals in human service programs at local, state, and federal levels. These individuals also need to understand how to calculate accurately the true costs of transportation services and how to apply the principles of proportional cost allocation to share costs equitably among all recipients of transportation services. This report provides a common, unified approach that can be used to calculate the full cost of providing transportation services by all transportation providers: public transit authorities, human service agencies, not-for-profit agencies, or private-for-profit providers. Given the variety of agencies involved in delivering community transportation services, addressing multiple perspectives should add greatly to the validity, applicability, and imple- mentability of the results presented by this study. When a participating agency asks, âHow much should I pay?â this report provides the methods necessary to answer that question in a consistent and equitable manner.
1 Chapter 1 How to Use This Toolkit 3 Chapter 2 The Benefits of Better Transportation Cost and Service Data 3 Program Management Improves 4 Community-Wide Cost Effectiveness Improves 4 Funding Requests Are Viewed More Favorably 5 Summary 6 Chapter 3 Factors That Affect Transportation Cost and Service Reports 6 Many Agencies Need Better Cost and Service Accounting 7 Reporting Problems Affect Transportation Coordination Efforts 8 Requirements for Uniform Service Cost Reporting 9 Chapter 4 Data Needed for Measures of Transportation System Performance 9 Performance Assessments Need Specific Data 9 Basic Measures Can Express Whatâs Needed 10 Detailed Performance Assessments Are Possible 10 Simple Data Provide Rich Measures 11 More Detailed Data Answer More Questions 12 Current Efforts Often Are Incomplete 13 Summary 14 Chapter 5 Types of Transportation Services to Recognize 14 Four Categories Describe Transportation Services 16 The Four Service Types Explain Typical Service Variations 17 Chapter 6 Transportation Accounting Fundamentals 17 Overall Approach and Accounting Structure 18 Standardized Definitions for Services and Costs 18 A Common Chart of Accounts 19 Different Kinds of Costs 21 Understanding How Costs Are Incurred 22 Summary 23 Chapter 7 Whatâs the Right Price for That Transportation Service? 23 Prices Charged Should Be Equitable and Understandable 23 All Stakeholders Should Pay Their Fair Share 28 Summary C O N T E N T S
29 Chapter 8 Applying the Cost Model to Various Scenarios 29 Whatâs the Cost of the Current Services? 29 Should We Continue to Provide Services? 30 Whatâs the Right Price for Each Purchasing Agency? 32 Summary 33 Chapter 9 Instructions for Using the Cost Sharing Software of the Cost Sharing Toolkit 33 Introduction 33 The Cost Sharing Model 35 Using The Cost Sharing Model 42 Glossary 59 Appendix A The Regulatory Environment for Federally Funded Transportation Services 65 Appendix B The Federal Coordinating Councilâs Vehicle Sharing Policy Statement 66 Appendix C Examples of Fully Allocated Transportation Cost Accounting Programs 68 Appendix D Typical Data Collection and Reporting Requirements in Contracts for Transportation Services 70 Appendix E Depreciation of Capital Expenses Note: Many of the photographs, figures, and tables in this report have been converted from color to grayscale for printing. The electronic version of the report (posted on the Web at www.trb.org) retains the color versions.