July 13, 2015 - From the July, 2015 issue

New LA Metro CEO Washington Favors Public/Private Partnerships

Phillip Washington was appointed CEO of the Los Angeles County Metropolitan Transportation Authority in March, coming west from Denver’s Regional Transportation District. At the June meeting of the Los Angeles County Economic Development Corporation Board of Governors, Washington explains five mega-trends in transportation, then articulates his goals for Metro in the context of these national shifts. He emphasizes the need for public-private partnerships in the context of shrinking federal funds for major infrastructure. MIR presents an edited transcript of these remarks, with an introduction by LAEDC President and Chief Executive Officer Bill Allen.

Phillip Washington

“This office will do the deals, and not just talk about the deals... [Our] job is to get to ‘yes’ as a government agency, rather than, ‘We’ve got to study it and the answer is no.’” —Phillip Washington

Bill Allen: Phil Washington is a dynamic and highly respected leader in the American public transportation industry. In fact, he’s the current chair of the American Public Transportation Association. He’s come to Los Angeles at a time when Metro is implementing the largest modern public works program in the United States.

In his new position as Metro CEO, Mr. Washington oversees an agency that transports 1.4 million boarding passengers on an average weekday, riding on a fleet of 2,000 clean-air buses and six rail lines. Metro is our lead transportation-programming agency for the County of Los Angeles.

Mr. Washington comes to Los Angeles from Denver, where he was the CEO of Denver’s Regional Transportation District since 2009, and established a reputation for being a creative manager and a highly effective leader who has come up with innovative ways to get projects done on time and under budget. 

Originally from the South Side of Chicago, Mr. Washington is a 24-year veteran of the Untied States Army where he held a rank of Command Sergeant Major, the highest non-commissioned officer rank an enlisted person can achieve. He may need those leadership skills to move such an ambitious agenda forward in this region. He has a B.A. in Business Administration from Columbia College and an M.A. in Management from Webster University.

He is the right man at the right time for our regional transportation agency. Please help us commit to partnership with Phil Washington.

Phillip Washington: I’m very happy to be here. I want to share my vision and what we’re doing at Metro.

LA Metro is an economic engine. We have a $5.6 billion budget for 2016. We’re working on and managing capital projects right now of about $2.5-3 billion. Our operations budget is about $1.7 billion, plus subsidies to local communities of about $1.4 billion.

I’m very excited about Metro’s partnership with the business community and with the LAEDC. The LAEDC’s goals are so similar to what we’re doing. They tie very well into my vision for LA Metro.

I’m the current chair of the American Public Transportation Association and I was very honored to lead a national strategic planning taskforce in the transportation industry to identify various mega-trends and put together a strategic plan for transportation in this country.

We identified five mega-trends that we believe characterize the environment we will be working in for the next five to 10 years.

The first mega-trend was safety and security. I’ll start with safety first, and the huge move toward positive train control. Positive train control is designed to stop a train if it passes a red signal, and to slow a train down if it’s going 80 miles an hour in a 50 mile an hour curve. Positive train control might have been able to prevent some of the rail accidents that have happened around the country. As technology continues to advance in the transportation industry, with faster speeds and more complex systems, safety is going to be huge.

California is leading the way in implementation of positive train control. The current deadline for installation is December 31, 2015. I believe that rail here will be the only system around the country that meets that deadline.

Looking at security, our systems are very vulnerable. I spent a lot of time in the military, and so I know a little bit about security. We have to work to bolster it, perhaps through technology.

Closely aligned with that safety and security mega-trend is asset management and state of good repair. Our transportation systems and infrastructure in this country are aging. This year, we will celebrate the 25th anniversary of rail at Metro. After we cut the ribbons for our anniversary, I’m going to be thinking, “How do we take care of the system?” We have to take care of what we have before we start building a whole lot of other stuff. If you don’t have good asset management and you’re not taking care of what you already have, that leads to a safety issue—like warped tracks, for instance. With 25 years of rail in the LA County area, we are a relatively young system compared to the legacy systems back in the Northeast.

The next big mega-trend we identified was resources. I liken this to a three-legged funding/financing stool, in terms of building transportation infrastructure.

The first leg of the stool is local investment. LA County has stepped up with Measure R in 2008. There’s talk now about a Measure R2. The last time I looked at local investment and sales tax initiatives around the country, the success rate was about 72 percent. That tells me that first leg of the is relatively strong. Referendums and tax initiatives are successful. People in communities and regions are investing in their own infrastructure

The second leg is the private sector. They have capital. I believe that the private sector is willing to invest in transportation infrastructure—with a reasonable return, of course. We want to do public private partnerships. Those P3s accelerate projects years ahead of what we normally could do with traditional funding mechanisms. I believe the second leg of that stool is strong.


The third leg of the stool is federal funding. That leg is wobbly. That leg is weak. We do not have a long-term transportation funding bill. The can has been kicked down the road again until July 31. There’s talk about a long-term bill that will come with tax reform, but we don’t have a long-term bill. That’s important because, in terms of long-term planning, it’s tough to make an assumption that federal dollars will be there, either in the New Starts process or otherwise. If I try to plan a mega-project for years down the road and I make the assumption that I’m going to get some federal dollars, it becomes a risk. The private sector, if it’s in the deal, is going to charge me a risk premium for the risk of my own government.

The third big mega-trend was demographic shifts occurring in this country. There’s gentrification happening in our urban cores, where we are displacing populations that, in many urban environments, may be the very people dependent upon our transit services. That affects my bottom line. As we move the transit-dependent populations and communities further away from the urban core, I have to put a bus route further out to accommodate those transit-dependents. In LA County, the minority is becoming the majority. How can we be proactive in reacting to that?

How do we create good land-use policy around transit-oriented communities and the infrastructure that we’re building? 80 percent of the world’s population in the next 20-30 years will be in urban areas. Is our infrastructure ready to handle and to accommodate that many people coming into the urban cores—whether it’s water, sewage, or transportation systems? I don’t think so.

The fourth big mega-trend is workforce development and lifestyle changes. I often say that if some miracle happens tomorrow—we have a functional Congress, we get a long-term transportation bill, and manna begins to fall from heaven so we have all the transportation infrastructure dollars that we need—I don’t think we would be people-ready in terms of career pathways, especially in the blue-collar fields. We would not be ready to build the rail and rebuild the infrastructure in this country. I’m worried about that. Do I have the track maintainers, signal people, and the systems people? We have work to do in this area. That is why I was so excited to be there with Bill to announce the $15 million grant to create those pathways.

The last big mega-trend was accelerating technological innovation. Technological acceleration is happening in transportation. What will happen when autonomous vehicles and automated vehicles hit the road? What impact will that new technology have on various industries? If you are in your car but not actually driving, how does that impact the insurance industry?

Related to those five mega-trends, I want to highlight a couple of things from the vision statement I put out to the 10,000 LA Metro employees.

Safety and security are the number one priority. We must get people from A to B safely.

Regarding innovation in funding and finance, I want to create an Office of Extraordinary Innovation at LA Metro. This office will do the deals, and not just talk about the deals. I want to do things that have never been done in this country in terms of infrastructure project delivery. That office’s job is to get to “yes” as a government agency, rather than, “We’ve got to study it and the answer is no.”

Fiscal discipline must become the norm: partnering with the private sector and not being so prescriptive. I believe that government is too prescriptive in their design specifications and in everything else. I want to be able to evaluate creativity in submittals. In the Denver region, as we were putting our P3 together for the line to the airport to downtown, I said:  “I want the train to get from downtown to the airport in 30 minutes. I don’t care how you do it.” Not being too prescriptive means creating an unsolicited proposal policy where we will encourage the private sector to bring ideas to us, rather than waiting on an RFP to come out. That policy says, “You bring your ideas and give us 30-45 days to determine whether it has technical or financial merit. If it does, we will begin either a competitive-type process or a single-source or sole-source-type process.”

The last thing I’ll talk about is good project management and accelerating projects while understanding that the car is not the enemy. We want to build a balanced transportation system that includes the car and bicycles, and that does not forget about the basics like curbs and sidewalks. We’re not going to get everybody out of their cars. But you might drive your car two miles to the park-and-ride and then get on the train. If there’s a bike-share place there after you get off the train to take you your last mile, that’s a balanced transportation system—with technology that tells you when the bus or the train is going to get there.

David Abel: Thank you for your comments, your energy, and your focus here. First mile-last mile is a preoccupation for many cities and metropolitan areas. It certainly is for this 4,000-square-mile county. What are your thoughts from Denver and for LA about that first mile-last mile agenda?

Phillip Washington: That goes back to a balanced transportation system. We need to work with the cities and areas within the county to create last-mile solutions. We just partnered with Zipcar, with an event last week that allowed Zipcar to park their vehicles at our park-and-rides for free. Those kinds of partnerships with the private sector can address the last mile. We’re working on a bikeshare program. If all of that is there and you still have to walk to your final destination, we go back to the basics of sidewalks and curbs.

Kecia Washington: You mentioned gentrification. What should Metro’s role be with respect to projects like Crenshaw and others, where there’s obviously going to be a shift in population? Should Metro’s policy be to hold in place businesses that are there, or are you agnostic about whoever comes in?

Phillip Washington: We do not want to drive businesses out of business. The Metro Board created the Business Interruption Fund just for that reason. The intent of this infrastructure investment and construction is to not ruin businesses. I would like to see those businesses remain in the community.

I was down on the Crenshaw Line last week. I talked to business owners, checked out the construction, and went down into the tunnel at 36th and Crenshaw, where the Expo Line is going to intersect with the Crenshaw Line. We are trying to minimize the impacts of that construction on business. It is very difficult, though.


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