Traffic Incident Management Cost Management and Cost Recovery Primer

Chapter 7. Closing Thoughts

Overall, the research conducted for this publication did not reveal a practice of managing and recovering costs associated with traffic incident management across any of the TIM disciplines. However, in reviewing the current status of TIM programs across the Nation, the topic of TIM cost management and cost recovery is and will soon become critically important to all TIM stakeholders. This document offers a road map with potential solutions for the TIM community to employ in addressing this topic, and FHWA hopes that its contents will encourage a dialog within the TIM community about how to pay for this necessary service.

The community's needs are easy to define:

Volunteer and career fire departments face decreasing property tax revenue and increasing safety costs associated with training and equipment;
Law enforcement agencies face reduced funding for staff and support systems and increased numbers of reportable crimes not associated with TIM;
EMS must deal with an aging population that, when transported, often costs more than is permissibly reimbursable through insurance or Medicare, affecting these services' ability to sustain their function and reducing the resources available to respond. Fewer resources available results in a reduced ability to provide service during the "golden hour";
The future of transportation funding at all levels of government is uncertain, and traditional sources of money may not be available in the future. This will require agencies to reevaluate the benefit of services offered in a constant and ongoing manner;
Towing and recovery operators continue to face new safety and equipment costs while trying to maintain competitive rates that allow them to stay in business; and
Considerable pressure exists for all organizations to make their operational, tactical, and strategic processes more efficient and effective.

However, there are some things that the TIM community can continue to do to help identify solutions to these and other TIM challenges.

Continue to Make the Case for TIM

The transportation landscape is changing very quickly as the traveling public's mobility demands sharpen and tolerance for delay diminishes. It is likely that the visibility for TIM will continue to become more prevalent. It is already becoming a major focus related to the freight industry. Freight Analysis Framework projections show that freight movement will increase by more than 60 percent by 2040. With these increases, maintaining system performance for goods movement by truck will be a major challenge. Shippers will demand that the roads be cleared of incidents as quickly as possible (as will those receiving the goods, whether manufacturers or retail outlets) – for simple economic reasons.

The question will be whether TIM budgets will be sufficient to increase their operations consistent with the anticipated growth in the need for TIM. Federal transportation revenues have not increased given that the Federal gas tax rate has not changed since the 1993. Although there have been some increases at State levels, State revenue sources likewise have not kept pace.

Further, even though operations have become mainstreamed, operations still needs to compete with infrastructure for an ever decreasing pot of funds. This is exacerbated by the fact that operations are labor intensive and are therefore costly to run. For TIM, however, which requires not just significant labor resources but also costly specialized equipment and specialized operator and responder training, State DOTs may view continued funding for TIM programs with more reservations than other operations components.

As a result, there will be a continuing need for collaboration between MPOs and DOTs on TIM along with all transportation operations strategies as an alternative to the ever more expensive planning and construction of new capacity. Collaboration will need to be directed towards developing operations objectives that take into account operations performance during the planning process and incorporating operations solutions into investment decisions that support identified operations objectives.

TIM practitioners understand that TIM provides a good value for expenditures; however, the planning process will require that the case for TIM be documented in performance measures. Calculating these performance measures will require a new level of information only available through cost management activities.

Conduct Pilot Projects

One way to gain real world experience, particularly in the area of cost management, is for one or more State transportation agencies to undertake focused pilot projects to test these concepts. This would allow for dedicated and purposeful tests that would address individual elements of cost management.

The focus would be on one or more of the different phases of cost management:

Cost planning – how good tracking and analysis can aid in estimating future costs and budgets;
Cost tracking – how transparent the process can be for better cost data tracking;
Cost analysis – create cost information across a range of measures that can be used in planning, evaluating and decisions; and
Evaluation and decision – how the process can support future programming and resource allocation.

These pilot projects could test how well cost management can be integrated into an agency's processes or identify the benefits of implementing these ideas and provide success stories that can be further communicated through the industry. The pilots would provide the practical experience necessary to gain acceptance within and among agencies. Multiple pilot projects could address the most significant aspects of cost management:

Asset management – illustrates how TIM cost data could be used in an agency's overall management of assets;
Resource management – promotes a fuller understanding of costs associated with personnel;
Performance management – demonstrates the establishment of TIM performance measures and the cost data inputs to those measures; and
Visualization – provides illustrative tools to make the message better understood by various audiences.

Dissemination of Research and Lessons Learned Information

This primer was undertaken to share the concepts of cost management and cost recovery, but without the existence of a deeply ingrained practice in this area, for the most part, it presents model policies driven by best practices in related areas. An important observation is that State transportation agencies adopt innovations over time, and different parts of an organization do not adopt an innovation simultaneously. As with other new methods, agencies can expect cost management and cost recovery techniques to continue to become more important over time.

Practitioners, especially TIM mid-level managers, should consider adopting policies and incorporating the lessons presented in this primer. Readers are encouraged to visit the primary sources for information about the principles of TIM cost management and cost recovery to obtain detailed information on related issues:

The FHWA Office of Operations (https://ops.fhwa.dot.gov/), which has a mission to advance the operational practices and capabilities of State transportation agencies. The FHWA will continue to advance these concepts to the TIM community through future training, workshops, and other outreach activities.
The National Traffic Incident Management Coalition (http://www.transportation.org/Default.aspx?SiteID=41), which includes representatives from many of the industry groups that can disseminate the information to a broad audience.

Additional Research

The subject of cost management and cost recovery could benefit from additional research in areas such as:

Minimum standards for cost management – this project would identify a minimum set of parameters that are necessary to have a good cost management process for TIM. Items would include the specific cost tracking datasets that are necessary and the range of cost analysis tools that could be used to create the cost information that is most valuable to a transportation department. A useful product would be a basic template for cost management similar to a project planning checklist.
Strategies for visualization – this project would involve developing simple tools that a TIM manager could employ to present TIM cost management data to agency officials or political leaders to make the case for the value of TIM. These tools would assist in displaying key information for use in asset management, resource utilization, and performance measurement.