2. Transportation Coordination: A Literature Review and Summary of Practice

This chapter summarizes several key research studies related to the coordination of local transportation services, the experiences of other states and local communities who have tackled these issues and developed effective solutions to improve transportation services to their residents.

This chapter is divided into five sections. The first provides definitions of coordination and related concepts. The next section traces the evolution of federal policy toward coordination and identifies legislative and administrative mandates that must be followed in North Dakota. The third section summarizes key studies that identify barriers to coordination and the benefits and costs of coordination. The fourth section of the chapter briefly summarizes the experiences of several states in either legislating or actively encouraging coordination. The final section summarizes several reports that propose processes or models for achieving coordination. All of the information presented in this chapter provides background on ways to achieve coordination and related challenges and benefits.

Research studies, legislative actions, regulatory efforts of federal, state, and local governments, and the experiences of individuals provides a rich source of information about coordination efforts. This information may also help policymakers in North Dakota as they devise coordination strategies for the state's transportation programs.

For more than 30 years, as public and human service transportation programs were created and expanded, transportation experts have decried the wasteful duplication of services and unnecessary gaps in service caused by small-scale operations which provide service to specific market niches. Since the late 1970s, service coordination has been proposed as the solution to these problems. The most simplistic and incorrect understanding of transportation coordination is the consolidation of all existing transportation providers into a single operation that receives all transportation funding and provides all rides for agency clients or the general public. While such a model has been followed in some communities, this option is not necessarily the desired outcome of coordination efforts. Various degrees of cooperation and information and resource sharing by independent systems have been shown to achieve the efficiency and service quality benefits attributed to coordination.

2.1 What is Coordination?

Coordination is defined as a tool for better resource management. It requires people from different agencies and different client bases to work together to manage vehicle operations, planning, maintenance, purchasing and marketing of transportation services. Four key attributes of this process are funding, shared responsibilities, management and shared power. A coordinated system strives to improve cost effectiveness, reduce cost per ride, and increase the quantity and quality of transportation services. In this way, coordination is a management tool for better allocation of scarce transportation resources.

Coordination is an ongoing process, not a one-time event. It is not like constructing a building where you plan for the construction, build the building, and use it for many years with low maintenance. It is more like living a healthy lifestyle. Coordination requires daily attention for a span of years, just like eating, exercise, and good mental health for long stable healthy life. In coordination, many things change with the passage of time; changes in programs, clients served, management, regulations, and willingness by individuals to cooperate. Therefore, a coordinated system needs someone to continually nurture it to keep the system healthy and strong.

2.2 Which Transportation Services are Likely to be Coordinated?

In the late 1960s and early 1970s, as a part of the "Great Society" movement, the federal government created a number of human service programs to respond to unmet needs of low income, disabled, or elderly persons. These programs helped individuals obtain and retain jobs and access health care, nutrition programs, mental health care and rehabilitation services. Programs also provided education to preschool children. A common complaint of these programs was that without transportation, none of the other programs could be accessed and therefore the benefits of the program were not available to those needing transportation. In response, most human service agencies created and/or funded transportation for their clients. In addition, public transportation services once provided by private companies were now being provided by government-subsidized agencies.

At the federal level, the departments of Transportation, Health and Human Services, Labor, and Education became major funders of transportation services - each through their own networks of grantees following their own priorities and program guidelines. A Government Accounting Office (GAO) study in 2003 estimated that 62 federal agencies funded transportation programs; 29 of these programs spent a total of more than $2.4 billion on transportation in 2001.³ While Department of Transportation funds were used primarily to support traditional fixed-route bus and rail services, human service agency transportation was typically offered as demand-responsive service that provided door-to-door transportation for clients who could not access regular fixed-route services, either because the service was unavailable in their area or because they had some form of disability that prevented them from using regular transit services.

The Department of Transportation's role in funding demand-responsive service grew in the late 1970s and 1980s as federal funding grew to enable rural areas to establish transit systems. While some of these services followed the traditional fixed-route delivery model, many in sparsely settled areas offered demand-response service. The 1990 passage of the Americans with Disabilities Act and related requirements that fixed-route transit systems also provide comparable paratransit (demand response) services within their service areas promoted an even greater expansion of paratransit services around the county.

Most of the federal transportation programs are administered by state agencies; local systems obtain funding and receive program oversight at the state rather than from the federal government. While all state programs must follow federal regulations and guidelines, transportation-related funding and policy decisions can and do vary from state to state because states have discretion which may be used to encourage or require coordination. Significant "players" in North Dakota transit include the North Dakota Department of Transportation and the North Dakota Department of Human Services. The directors of both of these agencies are appointed by the governor.

The nature of the transportation coordination challenge also varies from community to community because not all human service and public transportation programs are found in every urban or rural area. Recognizing these differences, the approach taken in this study is to determine the nature and size of each program's presence in each of the state's eight planning regions. Chapter 3 presents detailed information on the transportation resources available in each region.

2.3 Evolution of the Federal Role and Policy on Coordination

By the late 1970s, the federal government became concerned about the proliferation of uncoordinated transportation programs that it funded. One of the earliest studies of the issue was performed by the General Accounting Office in 1977.⁴ That study examined hindrances to the coordination of transportation programs for persons participating in federally funded grant programs. Differences in program eligibility, priorities, accounting and recordkeeping requirements were all identified as hindrances as was misinformation about program requirements and restrictions. This focus on federal barriers to coordination led to the 1986 formation of a coordinating council created by the Departments of Health and Human Services and Transportation. This council identified 64 barriers to transportation coordination and attempted to offer federal responses to them. The council met from time to time over the next 10 years, but few changes resulted. In 1998, the council's name was changed to the Coordinating Council on Mobility and Access and increased attempts were made to promote state-level coordination efforts.⁷

The most recent federal effort to encourage coordination is the current "United We Ride" program sponsored by the Federal Transit Administration (FTA).⁸ White House Executive Order 13330, dated Feb. 24, 2004, further enhanced the recent federal effort by establishing an Interagency Transportation Coordinating Council on Access and Mobility. The Council includes the departments of Transportation, Health and Human Services, Education, Labor, Veterans Affairs, Agriculture, Housing and Urban Development, the Interior, Attorney General, and the Social Security Commissioner.⁵ This order requires coordination of transportation services among a wider range of agencies and spells out specific functions for the Council to promote interagency cooperation, facilitate access to cost-effective services, encourage customer access, and provide a means to monitor and achieve the goals of the order.

The administrative and policy actions undertaken by various federal agencies were largely in response to policy guidance contained in public transportation legislation over the same period. In 1978, Congress amended The Urban Mass Transportation Act of 1964 to authorize operating assistance funding for rural areas with less than 50,000 population through what became know as the Section 18 program (the section of the act that authorized the funding). In order to get "Section 18" funding applicants had to show how their service was coordinated with other local services.

The Intermodal Surface Transportation Efficiency Act (ISTEA) enacted in 1991 also promoted coordination by mandating a number of changes in funding criteria. Two changes included: 1) increased attention to the efficiency of transit systems and application of cost-effectiveness standards to transit that receives federal assistance, and 2) coordination of transit programs between agencies and with other modes (e.g. airports, highways, and intercity rail services). The federal government's initial response was to mandate coordination. However, as a result of lobbying efforts (i.e. labor unions) Congress instead used the word "encourage" in the ISTEA bill of 1991. Incentives rather than mandates were to be used to achieve coordination. Transportation entities had to explain how they coordinated with other programs and providers to get funding.

The most recent federal transportation authorization, the Transportation Equity Act for the 21st Century (TEA-21), requires state agencies that administer many federal funding programs to ensure that local applicants and project activities are eligible and in compliance with federal requirements, including the provision of coordinated transportation services. TEA-21 also required local governmental agencies and nonprofit organizations that receive assistance from federal sources other than the FTA for non-emergency transportation services are required to participate and coordinate with recipients of FTA assistance in the design and delivery of transportation services. The "Uniform Administrative Requirements for Grants and Cooperative Agreements to State and Local Governments" (49 Code of Federal Regulations, Part 18) shifts the emphasis from national uniformity to uniformity of procedures and requirements within a state. Providers must "provide for maximum feasible coordination with transportation services" funded by other federal sources.⁶ To the extent feasible, sub-recipients should be encouraged to serve elderly people and people with disabilities not affiliated with their agencies and provide incidental service to the general public as long as this service does not interfere with serving elderly people and those with disabilities. TEA-21 contains stronger language supporting and encouraging coordination of transportation services than any previous federal legislation. The pending reauthorization bill will also likely continue this increased emphasis on coordination because the current FTA administration has made coordination a priority program of the department.

2.4 Studies Documenting Barriers to Coordination, Benefits and Costs of Coordination, and Conditions Necessary for Effective Coordination

Much of the early literature related to transportation coordination focused on real and perceived barriers to coordination faced by local transportation providers. These barriers interfered with the desire to achieve coordination in the community. Funding regulations were often given as the reason for not coordinating services, but the most common "real" reason for lack of coordination was "turfism" (e.g. the unwillingness of individuals to give up control of the services they are providing to their customers). While there are some conflicting federal mandates and rules which govern transportation services and varying client eligibility requirements, issues of control are more often the sources of resistance to coordination. Another is the lack of integration of administrative functions including coordinated planning and the allocation of the scarce financial resources.⁹

Transportation funds allocated through different federal departments (i.e. the Department of Health and Human Services (DHHS) and Department of Transportation (DOT)) have different objectives. DHHS is primarily for clients with special needs, while DOT funds are for the general public. The key to success in coordinating programs with different objectives is to design a service that can meet all, or at least a majority, of related needs.

Another obstacle to coordination is the difference in each program's accounting procedures and the need for accurate cost allocation procedures. These accounting and cost-allocation requirements result from each agency's desire to ensure that its funds are used to benefit its clients and that each agency participating in a coordinated system pays its fair share. Some granting sources such as the USDOT require detailed and specific accounting reports and cost-allocation procedures; most DHHS sponsored programs do not. Agencies differ in the detail of reporting of services rendered and trip purposes. The solution to these differences is to design an information system that provides all needed information and supports a cost-allocation plan that meets all agencies' needs.

Use of a fully allocated costing approach also highlights another barrier to coordination. Many agencies that provide transportation services as a small part of their overall program ignore many common costs of operation or charge direct transportation costs to other programs, thus understating the true cost of the transportation operation. A coordinated transportation system that must recover all costs may appear to be a higher-cost provider than the incumbent provider and thus agencies resist coordination, claiming it costs more.

Through many federally-funded studies, a number of state coordination efforts have been documented over the past 30 years. Three sources are suggested for those interested in further readings on previous efforts. These include the resources section of the United We Ride Web site and the bibliographies from two recent Transit Cooperative Research Program reports by Jon Burkhardt.¹⁰

To help promote coordination at the local level and to provide the evidence needed for legislative and regulatory action, studies have been undertaken to document the economic benefits of coordination. The general assumption is that the benefits of coordination far outweigh the costs. The most frequently stated benefits of coordination include increased efficiencies, decreased unit costs, and increased services. Related benefits include effective use of scarce resources, discovery of previously unused resources, reducing unmet needs by increasing services, and increased mobility for people with disabilities.

Coordination benefits are most achievable if a community's transportation vehicles have unused capacity and idle time. In addition, benefits may be realized through economies of scale related to administration, maintenance, operations, planning, and purchasing.¹¹ For example, it difficult to have fewer vehicles running at half capacity if there is only one vehicle in the community. Likewise, it is difficult to experience economies of scale if there is only one agency in the community or region that provides transportation services. If a community has a nursing home, a senior citizens center with transportation services, and a Head Start program, all with vehicles, then opportunities exist for coordination-related benefits. In North Dakota, with its many small communities, coordination at the regional level maybe required to realize benefits.

2.5 State Coordination Efforts

States have taken the lead role in making coordination a reality. Transportation Cooperative Research Program (TCRP) Report 101 reported on a survey of states to determine the status of coordination in the United States. All states responded to the survey. Every state said that it encouraged coordination as a philosophy; a majority said they were involved in coordination efforts. North Dakota was one of five states that did not report coordination activities as of 2002. Some states have mandated coordination through legislation. Florida and North Carolina did so for more than 20 years ago. About half of the states have coordinating councils or boards to encourage coordination and resolve issues that limit coordination options. Other states have adopted a more grass-roots approach whereby the states encourage local coordination efforts and support them through technical assistance, enhanced funding, and assistance with resolving regulatory/administrative barriers to coordination. A number of examples of each type of approach are presented below.