September 29, 2008 - From the Aug-Sept, 2008 issue

OCTA CEO Art Leahy Contrasts Orange County, L.A. County Transportation Infrastructure

While Los Angeles County grapples with Measure R, a local sales tax initiative on the November ballot, Orange County-its neighbor to the south-serves as a sterling example of what support for local funding and creative transportation solutions can do to mitigate traffic and improve infrastructure. With revenue from their Measure M and successes like SR 91 in his back pocket, Orange County Transportation Authority CEO Art Leahy recently spoke with MIR about the lessons offered by Orange County to the metro region's transportation planners.

Art Leahy

The following interview appeared in the MIR insert included in the September 2008 issue of The Planning Report.

There are a number of important bond measures on the statewide ballot this November. From the perspective of being the point person for the Orange County Transportation Authority (OCTA), what are your thoughts about the ability at the regional and state levels to garner the funds necessary to meet the challenges of traffic congestion?

Looking at the state and the federal level, there's a great deal of trouble up there, so we are looking more at local sales taxes in Riverside, San Bernardino, L.A., and Orange counties. We also have to continue the partnership we began to work on about two years ago on goods movement. We did really well in terms of the Prop. 1B bond for goods movement and the TCIF funds. We have to keep working together in Sacramento and in Washington D.C. On goods movement, what is really noteworthy is that we had Republicans of outlying counties supporting Democrats in Los Angeles, working together to bring more money for the home team. That's a major achievement that we have to build on.

Two years ago the voters of California passed a number of infrastructure bonds, including transportation infrastructure bonds. How well have those bond funds been invested-especially in Southern California?

It's been a real tough fight. There was very strong effort to put money into the Bay Area and Central Valley. The business argument for that wasn't very strong, but it ended up being a political decision. Orange County did very well given that we have a fairly short freight corridor in Orange County, so I'm happy with that, but the region should have gotten more money. Obviously, there are a lot of people in Sacramento who don't agree with that. We fought a good fight. For a year and a half, the five counties stayed together despite tremendous pressure from the governor's office and from the legislators up north.

How should the voters assess the success of the return on their financial and political support for these state bond measures, especially the transportation bonds?

You're going to see a whole lot of work on the freeways. Right now we're really focusing on grade separations. We're under tight deadlines to get those things underway, and there are seven grade separation projects moving forward right now in Orange County. It's very important because of traffic movement. It's important to get American trucks moving and not have them blocked by trains. It's important for air quality, but there's a public safety issue as well. When one mile-long trains come through each day, blocking fire trucks and ambulances, that's a very major and very important public safety issue.

With gas at $4 a gallon, is there new ridership pressure on Orange County's public transit?

Right now we are experiencing about 6 percent growth in ridership. Metrolink in Orange County is about 20 percent growth, maybe a little higher. We're seeing a lot of people rethink their options. We have residential development occurring by train stations, all up and down the LOSSAN corridor in Orange County. People are beginning to re-think their transit options and that's really a revolution in Orange County.

The July issue of TPR featured an article endorsing congestion pricing by Robert Poole of the Reason Foundation. What insights can you offer our readers regarding the value of congestion pricing for relieving traffic congestion, given Orange County's experience with SR 91? How does it work, and how could smart congestion pricing benefit Los Angeles' growing congestion along the 110 and 10 freeway corridors?

We purchased SR 91 using money we borrowed that's secured by the revenue. There is no public money in that purchase. That's very important to the taxpayers of Orange County, but it means we have to run it like a business. We have to have revenue that's sufficient to maintain the road.


We got rid of the non-compete protection clause that had prohibited improvements in the free lanes that run parallel. When we first bought the road, we developed a tolling policy designed to maximize speed on the lanes-the people who take the road are buying speed and buying time. To ensure that we were giving the customers what they wanted we did an evaluation of traffic volumes by hour of day and by direction. We correlated that with speeds. We found that somewhere between the first 3,200 and 3,400 cars per hour in a direction the speeds become unstable-not just a little unstable, they become a lot unstable, varying between 10-15 miles per hour and higher. When that happens, we actually make a refund to the customers, but then when they aren't happy, we aren't happy.

We established a toll policy that says when volumes get to a certain level we will raise tolls. Every quarter we reevaluate traffic volumes, and because of that, we now have tolls that are $10 one way on Thursday and Friday afternoons outbound (from Orange up to Riverside County). Tolls at other times of the day are as low as $1.50. Because of the high toll, our customers are constantly looking at us and they have come to understand how the policy works. As a consequence, some people have taken their trips out of the peak period onto the shoulder period. The peak has gotten wider.

We've accomplished a number of really cool things: we have the highest speeds in history; we have the highest volumes in history, because the peaks are wider; we have the highest revenue in history; and we have the highest average vehicle occupancy in history, because there is a discount for carpools. In addition, we use the profits from toll lanes to pay for improvement in the parallel free lanes, even in Riverside County. We've invested around $10 million in Riverside County, which benefits Orange County. This is a singular achievement and one of the best examples of congestion pricing in the country.

If you were to write a letter to L.A. Metro's commission regarding their new congestion reduction demonstration project, what would you stress? What points would you make?

Most importantly, people need to understand how congestion pricing works. Metro probably needs to develop focus groups. In Orange County, we know who our customers are. We know how and what they know about our operations. They know how the policy works. We know commuters manage their trip times around us, including the carpoolers. Commuters are smart. They're doing exactly what we wanted them to do. They are managing us to achieve their objectives. Most customers only use the toll road one or two times a week. They don't use it everyday. They use it on the days they need the speed. It's important to note, we have the highest volumes. In fact, the two toll lanes, during peak, have higher volumes than the parallel free lanes. The essential message we would give to L.A. is that congestion pricing works. If it's easy to understand, people will manage their behaviors around cost. That model is proven in Orange County.

What is your response to voters who complained at the development of SR 91 that state freeways are free because the tax payers have invested in them and that commuters shouldn't have to pay twice to use a public right of way?

There are a couple of important things. Number one, there is no public money in the toll lanes. A private investor built it, for profit, and that was very controversial. With our purchase of it five years ago, that has gone away. There is still no public money in it. Nobody has a right to use it because only the users are paying for it. Furthermore, by having free flow on the toll lanes because of the congestion pricing model we use, we take traffic off of the parallel, congested freeway lanes. We're actually increasing speeds on the free lanes, because of the high volumes on the toll lanes. Plus, we take the profits from the toll lanes and use them to pay for improvements on the free lanes. So, the guy who never even uses the toll lane is still benefiting at no cost to the taxpayers and no cost to himself.

Looking forward to 2009-2010 and a new administration in Washington, what are your concerns and what are your hopes and expectations for transit policy, transit funding, and infrastructure investment?

We have to get goods movement identified as a federal priority. That's choking all five counties of Southern California. That has to be a priority, and I think we are going to be successful there. The five counties of Southern California will have to stick together. We need to look to Chicago, New York, and other places like that. That has to be an imperative.

The discussion on revenue is going to be really hard. Right now the federals are holding back on their payments for freeway projects, so that's going to be a very difficult discussion. Right now, of course, we don't know who is going to be in charge next year. That will get cleared up in November, but the most important thing is that Southern California stands together-Republicans and Democrats. L.A. is obviously the center of that, but it needs to work with the other counties.



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