This memo outlines a three-pronged approach to addressing the issue of cost increases for those projects funded using the Boston Region Metropolitan Planning Organization’s (MPO) Regional Target funds. These categories of policy interventions are based on key takeaways from conversations had at the first three meetings of the TIP Project Cost Ad Hoc Committee on June 3, June 17, and July 8, 2021.
this memo, committee members should consider the extent to which the
recommendations below represent the preferred course of action for addressing
project cost increases. Committee members should also consider whether or not
additional policy interventions should be explored in advance of the drafting
of a more formal policy recommendation for presentation to the full MPO board.
These questions will be the basis of discussion at the July 29, 2021 committee
Projects may be
selected for funding by the MPO at any stage of design. This means a
significant number of projects are first placed on the TIP having only been
approved by the Massachusetts Department of Transportation’s (MassDOT) Project
Review Committee (PRC), the earliest possible stage at which a project may be
selected for funding.
In the sample
of 50 projects selected for funding by the MPO since federal fiscal year (FFY)
2016, projects saw the largest cost increases when advancing from PRC approval
to 25 percent design, with a median cost increase at this stage of 28 percent.
While costs still tend to increase later in project development, these
increases are more modest. The median increase when advancing from 25 percent
design to 75 percent design is 15 percent, and the median increase from 75
percent design to 100 percent design is nine percent. The earlier in design a
project is selected for funding, the greater the uncertainty with respect to
its final cost.
projects to have an approved 25 percent design prior to being programmed in the
projects to have an approved pre-25 percent project scope, including the
resulting updated cost estimate, prior to being programmed in the TIP.
another threshold for project programming, such as having a 25 percent design
submission (regardless of approval status) or having completed a design public
hearing (this takes place after the approval of 25 percent design plans).
The MPO should
set a higher threshold than PRC approval for projects to be selected for TIP
funding. Committee members should have further discussion before a
recommendation is made on a programming threshold. Coupled with this higher
programming threshold, the MPO could formalize a preliminary project evaluation
system that would offer proponents guidance on how their project would score
using the MPO’s criteria before proponents invest local resources to reach 25
percent design (or some other threshold).
is the appropriate balance between flexibility and certainty in the project
if anything, should be done for proponents that need additional support to
reach 25 percent design?
between project proponents and the MPO are largely focused on the development
of each year’s new TIP. During the early stages of TIP development in the fall
and winter, the most engaged proponents tend to be those who have projects
being scored and considered for funding. Proponents of projects that have
already been programmed in the TIP tend to interact with MPO staff and the MPO
board the most when a concern has arisen about their projects’ cost or
schedule. Project proponents are not required to attend MPO meetings at any
point during their projects’ life cycle in the TIP. MPO staff’s interactions
with MassDOT Highway District staff are mostly concentrated during early TIP
development in the fall when MPO staff are sourcing new projects to be
considered for funding.
In the absence
of regular, established check-in points between all parties, project-related
issues often only rise to the surface at MassDOT’s annual TIP project readiness
meetings in February. While this information is useful, the timing allows the
MPO only six or seven weeks to find solutions for any project cost or schedule
issues that come to light before the new TIP must be drafted. Given the limited
amount of time at this stage, it is difficult for all parties to exchange
high-quality information so that informed programming decisions can be made for
the new TIP. The lack of ongoing project monitoring also means that MPO staff
and the MPO board may not know when a project’s scope has changed.
numerous possible avenues for increasing regular engagement between all TIP
stakeholders, each with their own merits. Rather than detail all possible
options here, a recommendation is offered below based on the existing capacity
of the MPO staff and previously expressed needs of the MPO board.
check-in points should be established between MPO staff and project proponents,
proponents should include MPO staff on design submissions to MassDOT.
robust check-in points should be established between MPO staff and MassDOT
Highway District staff, allowing for proactive communication about current and
prospective TIP projects.
proponents should present detailed information to the MPO upon a project cost
or scope change beyond a specified threshold.
staff should create additional materials detailing the TIP process for
proponents, including outlining clear expectations for proponents should their
project be selected for funding by the MPO.
certain proponent actions be required? If so, how should this be enforced?
MPO members desire more regular project status updates? If so, what is the best
format for this information?
only scored by the MPO when they are under consideration for new funding. No
action is taken to reconsider projects when they experience a cost or scope
change of any magnitude.
formal mechanism to reconsider projects that have significant cost or scope
changes, the MPO has historically maintained its funding commitments to all
programmed projects. This includes covering any cost increases and
accommodating scope or schedule changes without a great degree of scrutiny.
Funding cost increases across the board limits the MPO’s financial capacity to
program new projects. In the absence of a formal, clear, and transparent
policy, any enforcement action taken on a project for a cost increase could be
considered arbitrary or unfair.
Intervention #2 above, there are numerous possible approaches to project
rescoring. The possible components of a policy are outlined below, but more
discussion is needed by the committee before a specific recommendation can be
a cost increase threshold, in dollars or percentage of cost, at which projects
how a cost-effectiveness measure should be used as a part of the scoring and
rescoring process for two purposes:
a tool to compare relative value across projects, such as in the Atlanta-Region
Transit Link Authority’s four-quadrant approach
a tool to compare the relative value of a project to itself prior to a cost
using cost-effectiveness scoring, determine the units of this measure:
if projects above a certain score are exempt from being rescored.
when rescoring happens:
simultaneous rescoring for all projects with cost increases of a certain scale
rescoring any time a project’s cost increases above a certain threshold
if any qualitative assessments are made of projects as a part of the rescoring
the result of a rescoring process that would trigger further action by the MPO
the range of desired actions for the MPO board to take if and when action is
of the recommended policy above contains questions that would need to be
answered in the drafting of an approach to project rescoring.