A performance audit of the Arizona Department of Transportation, highway programming process

              STATE OF ARIZONA
OFFICE OF THE
AUDITOR GENERAL
A PERFORMANCE AUDIT
OF THE
ARIZONA DEPARTMENT OF TRANSPORTATION
HIGHWAY PROGRAMMING PROCESS
OCTOBER 1982
A REPORT TO THE
ARIZONA STATE LEGISLATURE
REPORT 82- 4
DOUGLAS R. NORTON. CPA
AUDITOR GENERAL
STATE OF ARIZONA
OFFICE OF THE
AUDITOR GENERAL
October 20, 1982
Members of the Arizona Legislature
The Honorable Bruce Babbitt, Governor
Members of the Transportation Board
M r . William Ordway, Director
Arizona Department of Transportation
Transmitted herewith is a report of the Auditor General, A Performance
Audit of the Arizona Department of Transportation, Highway Programming
Process. This report is the second of a s e r i e s of reports t o be issued on
the Arizona Department of Transportation and is in response t o Senate B i l l
1001 enacted by t h e T h i r t y - f i f t h Legislature, Second Special Session i n
1981.
The blue pages present a summary of the report; responses from the
Director of the Department of Transportation and the Chairman of the
Transportation Board are found on the yellow pages preceding the appendix.
My s t a f f and I w i l l be pleased t o discuss o r c l a r i f y items i n the report.
Respectfully submitted,
~ o u ~ r Ra. sN orton
Auditor General
S t a f f : B i l l Thomson
Peter Francis
Sylvia Forte'
W i l l Wright
Enclosure
1 1 1 WEST MONROE SUITE 600 PHOENIX, ARIZONA 85003 ( 602) 255- 4385
OFFICE OF THE AUDITOR GENERAL
A PERFORIIANCE AUDIT OF THE
ARIZONA DEPARTMENT OF TRANSPORTATION
HIGHWAY PROGRAMMING PROCESS
A REPORT TO THE
ARIZONA STATE LEGISLATURE
REPORT 82- 4
TABLE OF CONTENTS
Page
INTRODUCTION AND BACKGROUND 1
FINDINGS
FINDING I 5
Because of weak s t a t u t o r y roles, the Transportation Board
and the ADOT Director do not have adequate control over
highway programming decisions.
CONCLUSION
RECOMMENDAT IONS
. FINDING I1
The Transportation Board does not have adequate
information nor s u f f i c i e n t project monitoring authority t o
properly f u l f i l l its highway programming r e s p o n s i b i l i t i e s .
CONCLUSION
RECOMMENDAT IONS
FINDING 111
The Department's s t a t u t o r y , technical r a t i n g formula
has limited u t i l i t y for establishing project p r i o r i t i e s
and could be simplified.
CONCLUSION
RECOMMENDAT IONS
FINDING I V
The Transportation Board and the P r i o r i t y Planning
Committee did not f u l l y comply with the Open Meeting
Law prior to our audit.
CONCLUSION
RECOMMENDAT IONS
AREAS FOR FURTHER AUDIT WORK
WRITTEN RESPONSES TO THE AUDITOR GENERAL'SR EPORT
APPENDIX
Consultant evaluation of the ADOT p r i o r i t y r a t i n g formula
LIST OF TABLES
- Page
TABLE 1 - Current- year highway c o n s t r u c t i o n program planned
expenditures f o r f i s c a l years 1978- 79 through 1981- 82 1
TABLE 2 - Policy r e s p o n s i b i l i t y i n e i g h t s t a t e s with boards or
commissions involved i n highway programming 12
LIST OF FIGURES
FIGURE 1 - 1982 Arizona Highway Systems Map
FIGURE 2 - Program and P r o j e c t A l t e r n a t i v e s : Wisconsin
FIGURE 3 - Low- Volume Roads on the S t a t e Highway System
- Page
2
19
2 1
SUMMARY
The Office of the Auditor General has conducted a performance audit of the
Arizona Department of Transportation ( ADOT), Highway Programming Process
in response to Senate B i l l 1001 enacted by t h e T h i r t y - f i f t h Legislature,
Second Special Session in 1981. This report i s one of a s e r i e s to be
completed on the Department of Transportation.
One of the most important r e s p o n s i b i l i t i e s of the Arizona Department of
Transporation is the development of the five- year highway construction
program. The five- year highway program is a multiyear schedule of up to
$ 1 b i l l i o n in highway construction projects which is updated annually.
ADOT' s r e s p o n s i b i l i t y for programming highway construction projects is
vested by law in the Transportation Board, a seven- member body appointed
by the Governor, and the Transportation P r i o r i t y Planning Committee, a
departmental management committee.
Results of the audit indicated t h a t t h e Transportation Board and ADOT
Director lack adequate control over highway programming decisions.
Because t h e i r s t a t u t o r y roles are weak, neither the Board nor the Director
have been adequately involved i n e s t a b l i s h i n g and reviewing c r i t i c a l
policy decisions which are an e s s e n t i a l p a r t of the highway programming
process ( see page 5 ) . In addition, current s t a t u t o r y procedures governing
highway programming are unworkable and appear to be unnecessary.
Statutory changes are needed to:
1. Give the Transportat ion Board s p e c i f i c r e s p o n s i b i l i t y and
authority t o e s t a b l i s h p o l i c i e s to guide development of the
five- year highway construction program and
2. Assign the ADOT Director r e s p o n s i b i l i t y for developing the
highway construction program in accordance with policies
established by the Board.
If the s t a t u t e s are revised t o assign the ADOT Director r e s p o n s i b i l i t y for
developing the Highway Construction Program, the P r i o r i t y Planning
Committee established through A. R. S. 528- 111 w i l l be unnecessary and
should be eliminated from the s t a t u t e s . The ADOT Director should
e s t a b l i s h a departmental committee administratively, i f necessary, to
develop the annual highway construction program in coordination with the
Transportation Board ( see page 15).
The audit also revealed that the Transportation Board does not have
adequate program options and information on the r . of p rogram
policies to enable it to make well- informed highway programming
decisions. Staff recommendations t o the Board do not include an adequate
array of program options, including a l t e r n a t i v e funding levels, project
design and levels of improvement, with the advantages and disadvantages of
each option f u l l y analyzed. A formal evaluation of the impact of existing
program policies also is not conducted as part of the highway programming
process. Program opt ions should be developed f o r Board consideration and
the impact of program policies should be formally evaluated ( see page 17).
The Board also lacks s t a t u t o r y responsibilty to monitor the s t a t u s of
projects. A. R. S. 528- 106. C should be amended t o include the monitoring of
project s t a t u s a s a Board r e s p o n s i b i l i t y ( s e e page 22).
1 0
The Off ice of the Auditor General contracted with Cambridge Systematics,
Inc., a transportation consulting firm, f o r assistance in evaluating the
s t a t u t o r i l y required technical r a t i n g formula used by the Department to
set construction project p r i o r i t i e s . Results of the consultant study and
our own evaluation indicated that ADOT's technical r a t i n g formula i s
limited in use. The formula is used t o r a t e only major reconstruction
projects ( l e s s than 12 percent of highway program expenditures) and can
obscure important policy considerations when r i g i d l y applied.
In a d d i t i o n , t h e formula i s unnecessarily complex and could be
s i m p l i f i e d . A. R. S. 528- lll. B. 1 should be amended t o give the
Transportation Board and ADOT Director more d i s c r e t i o n a r y a u t h o r i t y and
f l e x i b i l i t y i n applyins the s t a t u t o r y c r i t e r i a i n the Highway Progra~ ii;- Lg
Process. In e s t a b l i s h i n g c r i t e r i a , the economic and environmental p o r t i o n
of the formula should be dropped and the t r a f f i c s a f e t y r a t i n g should be
consolidated with t h e s u f f i c i e n c y r a t i n g . Also, t h e s o c i a l , economic and
environmental f a c t o r s should be t r e a t e d a s policy i s s u e s t o be considered
by the Transportation Board and a more comprehensive economic b e n e f i t s
a n a l y s i s should be developed separate from t h e t e c h n i c a l formula ( s e e page
25).
The Transportation Board and the P r i o r i t y Planning Committee did not f u l l y
comply with the Open Meeting Law p r i o r t o t h i s a u d i t . Corrective a c t i o n
has since been taken ( s e e page 31).
F i n a l l y , because of time c o n s t r a i n t s and a r e o r g a n i z a t i o n which was
occurring during our a u d i t , we were unable t o address several i s s u e s ,
including whether the s t a f f i n g l e v e l of the T r a n s p o r t a t i o n Planning
Division is appropriate. For a statement o f a u d i t scope, see page 4. For
a list of p o t e n t i a l f u t u r e a u d i t i s s u e s , s e e page 35.
iii
INTRODUCTION AND BACKGROUND
The Office of the AudicJ; General has conducted a perforinance audit of the
Arizona Department of Transportation, Highway Programming Process in
response to Senate B i l l 1001 enacted by t h e T h i r t y - f i f t h Legislature,
Second Special Session i n 1981. This report i s one of a s e r i e s to be
completed on the Department of Transportation.
One of the most important r e s p o n s i b i l i t i e s of the Arizona Department of
Transportation i s the development of the five- year highway construction
program in cooperat ion with the Transportat ion Board. The f ive- year
highway construction program is a multiyear schedule of highway
c o n s t r u c t i o n p r o j e c t s which is updated annually. As shown i n Table 1,
approximately $ 200 million i n highway projects were scheduled for
construction i n the f i r s t year of the five- year program f o r f i s c a l years
1978- 79 through 1981- 82. Most of these projects involved pavement
preservation and reconstruction work on t h e e x i s t i n g S t a t e system, shown
in Figure 1, and construction of new routes.
TABLE 1
CURRENT- YEAR HIGHWAY CONSTRUCTION PROGUY
PLANNED EXPENDITURES FOR
FISCAL YEARS 1978- 79 THROUGH 1981- 82
( AMOUNTISN THOUSANDS)
F i s c a l Year Fiscal Year F i s c a l Year Fiscal Year
Road C l a s s i f i c a t i o n 1978- 79 1979- 80 1980- 81 1981- 82
I n t e r s t a t e
Primary*
Secondary**
Other
Total
* Major a r t e r i a l routes
** hlajor c o l l e c t o r s
FIGURE 1
1982 ARIZONA HIGHWAY SYSTEM M U
I YAVAPAI
, PlNAL 1
PHCPAREO RV
ARIZONA DEPARTMENT OF TRANSPORTATION
TRANSPORTATION PLANNING DIVISION
AS OF JANUARY 1. 1982
-- - STATE HIGHWAYS
SURVEY ONLY ( APPROX ALIGNMENT)
o u a * NUMBERS TEMPORARILY ASSIGNED
SCALE- MILES
ADOT ' s r e s p o n s i b i l i t y f o r programming highway c o n s t r u c t i o n p r o j e c t s is
vested by law i n t h e T r a n s p o r t a t i o n Board, a seven- member body appointed
by the Governor, and the Transportation P r i o r i t y Planning Committee, a
departmental management committee. Membership of the Committee c o n s i s t s
of the a s s i s t a n t d i r e c t o r s f o r highways, public t r a n s i t , a e r o n a u t i c s ,
administrative s e r v i c e s and t r a n s p o r t a t i o n planning and two department
executives appointed by the ADOT Director. The d i r e c t o r s of the Office of
Economic Planning and Development and the J o i n t L e g i s l a t i v e Budget
C o m i t t e e a l s o serve on the Committee a s nonvoting members.
A. R. S. $ 28- 111 e s t a b l i s h e s t h e following r e s p o n s i b i l i t i e s of the Priority
Planning Committee:
- Establishment of a t e c h n i c a l r a t i n g formula f o r s e t t i n g
t r a n s p o r t a t i o n f a c i l i t i e s c o n s t r u c t i o n p r i o r i t i e s ,
- Development of an annual five- year p r i o r i t y c o n s t r u c t i o n program
f o r Transportation Board consideration,
- Review of p r i o r i t y program changes or new p r o j e c t s requested by
the Transportation Board, and
- Recommending t o the Board p r i o r i t y program changes or new
p r o j e c t s needed during the course of the program year.
The Transportation Board, c o n s i s t i n g of s i x members representing
County- based Transportation D i s t r i c t s * and one member representing the
S t a t e a t l a r g e , is required t o determine p r i o r i t y planning with respect t o
t r a n s p o r t a t i o n f a c i l i t i e s pursuant t o A. R. S. 928- 106. The Board is
charged with the following s p e c i f i c highway programming r e s p o n s i b i l i t i e s
i n accordance with A. R. S. 528- 1825: - -
- Review and adoption of the P r i o r i t y Planning Committee's
recommended five- year c o n s t r u c t i o n program following a p u b l i c
hearing, . =
- Preparation of an annual report summarizing the five- year
program, and
* The s i x d i s t r i c t s include the following counties: 1- Haricopa; 2- Pima;
3- Cochise, Greenlee and Santa Cruz; 4- Gila, Graham and Pinal;
5- Apache, Coconino and Navajo; and 6- Mohave, Yavapai and Yuma.
- Revision of the program a s needed during the course of the year.
Audit Scope and Objective 0
The scope of our a u d i t work on the Highway Programming Process was limited
t o the following i s s u e s :
- Whether the Transportation Board and the ADOT Director have
adequate c o n t r o l over the five- year highway programming process.
- Whether the Transportation Board has s u f f i c i e n t information and
a u t h o r i t y to properly f u l f i l l its r e s p o n s i b i l i t i e s ,
( I - The usefulness and v i a b i l i t y of the r a t i n g formula used by the
Department t o e s t a b l i s h p r o j e c t p r i o r i t i e s , and
- Whether the Transportation Board and the Department have complied
( b
with the requirements of t h e Open Meeting Law.
In a d d i t i o n , we reviewed other functions and r e s p o n s i b i l i t i e s of the
Department's Transportation Planning Division which s t a f f s the Highway a
Programming Function. Because of time c o n s t r a i n t s and a reorganization
which was occurring during our a u d i t , we were unable t o address several
i s s u e s of concern, including whether the s t a f f i n g l e v e l of the Division i s
appropriate. For a list of p o t e n t i a l f u t u r e a u d i t i s s u e s , see page 35.
The Office of Auditor General expresses a p p r e c i a t i o n t o t h e members of the
Transportation Board and the Department of Transportation s t a f f f o r t h e i r
cooperation and a s s i s t a n c e during the course of our a u d i t .
FINDING I
BECAUSE OF WEAK STATUTORY ROLES, THE TRANSPORTATION BOARD AND THE ADOT
DIKECTOR DO NOT HAVE ADEQUATE CONTROL OVER HIGHWAY PROGRAMMING DECISIONS.
Major highway programming decisions have been made by ADOT technical s t a f f
without adequate review and control by the Transportation Board and the
ADOT Director. Because t h e i r s t a t u t o r y roles are weak, n e i t h e r t h e Board
nor the Director have been adequately involved i n e s t a b l i s h i n g and
reviewing c r i t i c a l p o l i c y d e c i s i o n s which are an e s s e n t i a l part of the
highway programming process. Further, although the i n t e n t of s t a t u t e s
governing highway programming was to strengthen the technical basis for
programming and to ensure proper decisions by the Board, some s t a t u t e s are
cumbersome, unworkable and appear t o be unnecessary.
Transportation Board and Director Lack
Control Over Major Sea££ Decisions
Because of weak s t a t u t o r y r o l e s , t h e Transportation Board and the ADOT
Director do not have adequate control over ADOT s t a f f decisions governing
the five- year highway construction program. Neither the Board nor the
Director have been adequately involved i n e s t a b l i s h i n g and reviewing
c r i t i c a l policy choices made by s t a f f . This input and review by the Board
and Director is needed f o r e f f e c t i v e programming.
Board and Director A r e Not Adequately
Involved i n Policy Decisions
The Transportation Board and the ADOT Director do n o t p l a y an adequate
r o l e i n e s t a b l i s h i n g policy d i r e c t i o n to guide development of the highway
c o n s t r u c t i o n program. In some cases, c r i t i c a l p o l i c y c h o i c e s a r e made f o r
the ~ o s tp art by the t e c h n i c a l l y oriented P r i o r i t y Planning Committee,
c o n s i s t i n g of ADOT s t a f f but not including the Director as a member. In
other c a s e s , p o l i c y choices a r e i m p l i c i t i n the Committee's p r i o r i t y
r a t i n g formula ( see page 25). Examples of these decisions include how
much should be spent on p r e s e r v a t i o n of e x i s t i n g S t a t e roads and what new
c o n s t r u c t i o n p:, Jecta should be funded.
a
The Department recently attempted t o address t h i s problem but with l i m i t e d
success. Recognizing the need f o r e a r l y p o l i c y i n p u t and d i r e c t i o n , t h e
P r i o r i t y Planning Committee presented t o the Board f o r the f i r s t time i n
December 1981 several policy i s s u e s which needed t o be addressed. These •
policy i s s u e s a r e as follows:
- The extent t o which Federal aid should be used f o r pavement
preservation ( e. g., resurfacing e x i s t i n g roadways), and how
pavement preservation funds should be used. ( I
- Whether e x i s t i n g expenditure p r i o r i t i e s concerning routine
maintenance, pavement p r e s e r v a t i o n and new c o n s t r u c t i o n were
appropriate and relevant.
- How " 15 Percent Fundsu* s e t aside f o r c o n s t r u c t i o n of c o n t r o l l e d
access highways i n urban areas should be used.
- How widening and/ or extending the S u p e r s t i t i o n Freeway ( S. R. 360)
should be funded.
- Whether l o c a l p a r t i c i p a t i o n i n the p r i o r i t y program process was
adequate, and how l o c a l input should be s o l i c i t e d . -
- Whether two p r i o r i t y programs should be developed by the
Committee r a t h e r than one because of u n c e r t a i n t y over the l e v e l
. . of a v a i l a b l e revenue. ( I
-
* S. B. 1001 enacted during t h e L e g i s l a t u r e ' s Special Session on
t r a n s p o r t a t i o n funding i n 1981 requires t h a t a t l e a s t 15 percent of
ADOT funds be spent on c o n t r o l l e d access highways i n the Phoenix and •
Tucson urban areas.
At a meeting on January 29, 1982, t h e T r a n s p o r t a t i o n Board reached
consensus i n two p o l i c y a r e a s : 1 ) the r o l e of public p a r t i c i p a t i o n and how
public p a r t i c i p a t i o n w i l l be s o l i c i t e d and 2) how input would be received
from the Maricopa and Pima Associations of Governments on the use of the
15 percent urban funds. However, the Board did not make o f f i c i a l policy
decisions i n any of the o t h e r a r e a s presented by the P r i o r i t y Planning
Committee. The Chairman of t h e Eoard expressed concern t h a t the Board not
overstep its s t a t u t o r y a u t h o r i t y .
Board and Director Involvement Is Needed
f o r E f f e c t i v e Programming
Transportation Board and Director involvement i n e s t a b l i s h i n g and
reviewing c r i t i c a l policy decisions is e s s e n t i a l f o r e f f e c t i v e
programming. F a i l u r e to provide f o r such involvement may r e s u l t i n
d i s r u p t i o n of the development of the p r i o r i t y program and may i c ~ e i rt he
s t a b i l i t y of the five- year c o n s t r u c t i o n program.
According to a u t h o r i t a t i v e l i t e r a t u r e , highway programming is not a purely
t e c h n i c a l process. Developaent of a p u b l i c a l l y acceptable program t h a t
equitably addresses t r a n s p o r t a t i o n problems r e q u i r e s c r i t i c a l policy
decisions which a r e based on both t e c h n i c a l a n a l y s i s and nontechnical
considerations.* Technical s t a f f who make most of t h e i n d i v i d u a l p r o j e c t
decisions need t o be guided throughout t h e programing process by p o l i c i e s
approved by top management and the Board.
The need f o r Transportation Board and Director involvement has a l s o been
recognized and reported by ADOT s t a f f . An ADOT s t a f f r e p o r t submitted t o
the P r i o r i t y Planning Committee i n February 1981 s t a t e d :
" An o v e r a l l concern w i t h t h e p r i o r i t y planning process
is t h a t the d e c i s i o n makers, i . e . , PPC, D i r e c t o r , and
Board do not g e t involved u n t i l l a t e i n the program
development when t h e r e is l i t t l e o r no time t o s e t
d i r e c t i o n o r make s u b s t a n t i v e changes."
* These nontechnical c o n s i d e r a t i o n s include p o l i t i c a l commitments,
l e g i s l a t i v e mandates, emergencies, s p e c i a l emphasis, commitments to
other agencies and system c o n t i n u i t y .
Lack of adequate Board and Director involvement i n the programming process
r e c e n t l y r e s u l t e d i n d i s r u p t i o n of p r o j e c t planning. The ADOT Director
intervened l a t e i n the program development cycle t o reverse an
unacceptable P r i o r i t y Planning Committee decision.
On Narch 4, 1982, the P r i o r i t y Planning Committee o f f i c i a l l y approved and
sent t o the Board and Regional Councils of Government a t e n t a t i v e
five- year highway c o n s t r u c t i o n program. The program, however, did not
include an important project-- extending the length of t h e S u p e r s t i t i o n
Freeway ( s. R. 360) i n Mesa. Although the Committee had attempted t o r a t e
and compare t h e S u p e r s t i t i o n Freeway p r o j e c t t o o t h e r major highway
c o n s t r u c t i o n p r o j e c t s competing f o r funds, it was unable t o develop a
t e c h n i c a l b a s i s f o r including the S u p e r s t i t i o n p r o j e c t i n the f i s c a l year
1982- 83 program. Important nontechnical considerations were ignored.
Because the decision was of major importance, the ADOT D i r e c t o r , who
r a r e l y becomes involved d i r e c t l y i n Committee a c t i v i t i e s ( s e e page l o ) ,
intervened on March 19, 1982, t o reverse the Planning committee's decision
on the S u p e r s t i t i o n p r o j e c t . The Director and the Transportation Board
chairnan, who had not been involved i n the d e c i s i o n , viewed the
Committee's a c t i o n as unacceptable.* Facing t i g h t deadlines f o r
completing its work, the P r i o r i t y Planning Committee h a s t i l y revised i t s
recommended p r o j e c t p r i o r i t i e s . * * The t e n t a t i v e Planning Committee
program subsequently presented t o the Transportation Board on March 26,
1982, included t h e S u p e r s t i t i o n Freeway p r o j e c t .
* According t o a Transportation Board member, the program was a l s o
unacceptable because it omitted the IColb Road p r o j e c t i n Tucson and.- ( I
- -
included a d i s p r o p o r t i o n a t e number of p r o j e c t s i n the Prescott area.
** It should be noted t h a t t h e Board and Department were required t o
prepare a program t h i s year under unusual and s p e c i a l circumstances.
Recently enacted t r a n s p o r t a t i o n finance l e g i s l a t i o n and u n c e r t a i n t y
over the amount of S t a t e and Federal funding a v a i l a b l e f o r the highway
program made programming deadlines d i f f i c u l t t o meet.
Lack of Board and Director involvement i n program policy s e t t i n g may a l s o
impair s t a b i l i t y of the five- year program." According t o ADOT s t a f f and
Board members, more Board policy involvement would improve s t a b i l i t y .
Both ACOT s t a f f and Board members have recognized the need t o improve
program s t a b i l i t y . In f i s c a l year 1980- 81, 27 percent of p r o j e c t s
scheduled f o r construction were e i t h e r delayed or dropped from the
program. In a d d i t i o n , most ( 6 1 p e r c e n t ) of t h e p r o j e c t s scheduled f o r
c o n s t r u c t i o n were new or added p r o j e c t s which had not been programmed
c o n s i s t e n t l y i n p r i o r years. Only 18 percent of p r o j e c t s scheduled f o r
c o n s t r u c t i o n i n f i s c a l year 1980- 81 were on schedule a s o r g i n a l l y
programmed.
Program s t a b i l i t y is important f o r two reasons. F i r s t , preliminary
engineering work done by the Department is based on the five- year
program. ** P r o j e c t s delayed or dropped from the program represent
unnecessary a d d i t i o n a l highway design work or work wasted by the
Department. Second, the five- year program serves as a b a s i s f o r manpower
planning and a l l o c a t i o n throughout the Department. A s t a b l e program is
needed t o plan e f f i c i e n t u t i l i z a t i o n of s t a f f resources.
Statutory Roles of Transportation Board
and ADOT Director Are Weak
The Transportation Board and ADOT Director lack adequate involvement i n
and control over highway programming because t h e i r s t a t u t o r y r o l e s a r e
weak. The Transportation Board does not have c l e a r s t a t u t o r y a u t h o r i t y to
e s t a b l i s h program policy, and pol'icy e s t a b l i s h e d is not binding on the
Committee. The Director has even a weaker r o l e s i n c e he has no e x p l i c i t
s t a t u t o r y a u t h o r i t y t o intervene i n the programin& process. By c o n t r a s t ,
boards and d i r e c t o r s i n other s t a t e s p l a y a stronger and more c e n t r a l r o l e
i n the highway programming process.
* Factors which can adversely impact program s t a b i l i t y include revenue
uncertainty, Federal o b l i g a t i o n l i m i t s ( annual c e i l i n g s on t o t a l
Federal aid highway spending by the s t a t e s ) and i n a c c u r a t e c o s t
projections.
** Highway c o n s t r u c t i o n p r o j e c t s can require seven years or more of
project development before being ready f o r construction.
Board Responsibility f o r
Policy S e t t i n g is Unclear
The Transportation Board has a weak policy- setting r o l e i n the programming
process. Neither A. R. S. $ 28- 1825 e s t a b l i s h i n g Transportation Board a
procedures f o r highway programming nor A. R. S. $ 28- 106 s e t t i n g f o r t h the
general powers and d u t i e s of the Board mention development of program
policy as a Board r e s p o n s i b i l i t y .
Although not c l e a r l y s p e l l e d out i n law, the Board appears t o have
policy- setting a u t h o r i t y . In an opinion dated March 11, 1982, the
L e g i s l a t i v e Council s t a t e d :
" Since the primary a u t h o r i t y t o develop a p r i o r i t y
program plan r e s t s with the Board, the Board has those
powers and d u t i e s which a r e reasonable t o f a i r l y and
e f f e c t i v e l y develop a statewide p r i o r i t y t r a n s p o r t a t i o n
f a c i l i t i e s c o n s t r u c t i o n program. It would appear t h a t
it is a reasonable e x e r c i s e of such powers and d u t i e s
i f the Board make . . . p o l i c y d e c i s i o n s . . . t o guide the
preparation of the ( P r i o r i t y Planning) Committee's
five- year c o n s t r u c t i o n program."
Under the current s t a t u t o r y d i v i s i o n of r e s p o n s i b i l i t i e s , however, policy
decisions made by the Board a r e not binding on the P r i o r i t y Planning 4
Committee. There is no s t a t u t o r y requirement t h a t the Committee follow
the Board's policy d i r e c t i o n although the s t a t u t e s do give the Board f i n a l
a u t h o r i t y over what p r o j e c t s a r e included i n the program.
ADOT Director IIas No Statutorv
Role i n Highway Programming
The Director of the Department of T r a n s p o r t a t i o n h a s no d i r e c t s t a t u t o r y
r o l e i n the highway programming process and, as a r e s u l t , lacks s u f f i c i e n t ( I
c o n t r o l over it. A. R. S. $ 28- 111 e s t a b l i s h i n g the P r i o r i t y Planning E -
Committee provides t h a t the Director appoint two members of the
Committee. The Director does not serve a s a member of the Committee,
however, and does not have c l e a r a u t h o r i t y to review Committee ( I
recommendations and intervene i n i t s a c t i v i t i e s .
According to ADOT s t a f f , the current planning committee system lacks
a c c o u n t a b i l i t y because of the weak s t a t u t o r y r o l e of the D i r e c t o r . In
recent years, the Director has become more involved i n highway programming
by providing input e a r l y i n the program development cycle. In a d d i t i o n ,
the Transportation Board approved procedures i n 1981 which gave the
Director r e s p o n s i b i l i t y f o r reviewing Committee recommendations p r i o r t o
t h e i r submission t o the Board. However, t h i s review usually occurs l a t e
i n the programming cycle and can r e s u l t i n d i s r u p t i o n of program planning
a s i l l u s t r a t e d i n the case example c i t e d e a r l i e r ( s e e page 8).
Board members and s t a f f interviewed s t r e s s e d t h e need f o r the D i r e c t o r t o
p l a y a stronger r o l e i n the highway programming process. The D i r e c t o r ' s
leadership is needed t o ensure t h a t t h e programming function i s
e f f i c i e n t l y and e f f e c t i v e l y accomplished by t h e ADOT s t a f f .
In an opinion dated April 26, 1982, t h e L e g i s l a t i v e Council s t a t e d t h a t
t h e L e g i s l a t u r e probably intended t h a t the D i r e c t o r p l a y a more c e n t r a l
r o l e i n t h e highway programming process.
1 I Since one of t h e Committee's main r e s p o n s i b i l i t i e s is
to recommend a long- term t r a n s p o r t a t i o n c o n s t r u c t i o n
schedule, it seems apparent t h a t i n order t o
e f f e c t i v e l y coordinate l o c a l government t r a n s p o r t a t i o n
planning with s t a t e planning the d i r e c t o r must take a
major r o l e i n t h e p r e p a r a t i o n of t h e t r a n s p o r t a t i o n
f a c i l i t i e s c o n s t r u c t i o n program.
I1 ... Given the broad a u t h o r i t y of the d i r e c t o r over the
department one could assume t h a t the l e g i s l a t u r e
intended t h a t the d i r e c t o r supervise the work of the
committee and the p r e p a r a t i o n of the t r a n s p o r t a t i o n
f a c i l i t i e s construe t ion program including review and
approval of the committee's recommendations p r i o r t o
t h e i r submission t o the board."
Other State Boards and Directors Have Stronger
and More Central Roles i n Highway Programming
As part of our audit, we reviewed l e g i s l a t i o n and practices in 14 other
s t a t e s i d e n t i f i e d by national experts* as having good programming
practices or features of good practice. Results indicated that boards and
agency d i r e c t o r s in other s t a t e s have g r e a t e r involvement i n and coilt r3l.
over the highway programming process.
Most t r a n s p o r t a t i o n boards o r commissions reviewed i n other s t a t e s have a
c l e a r policy role established by law. Eight s t a t e s reviewed had
t r a n s p o r t a t i o n boards or commissions while six s t a t e s did not.** Of the
eight s t a t e s with boards, as shown i n Table 2, s i x e s t a b l i s h a specific
s t a t u t o r y policy role f o r the board or commission.
TABLE 2
POLICY RESPONSIBILITY I N EIGHT STATES WITH BOARDS OR
COMMISSIONS INVOLVED I N HIGHWAY PROGRAMMING
Policy Responsibility
Established in Law
California
Iowa
New Mexico
Utah
Vermont
Washington State
Policy Responsibility
Not i n Law
South Dakota
Texas
In Utah and California the commission's policy r e s p o n s i b i l i t i e s are
primarily advisory in nature. In t h e o t h e r f o u r s t a t e s , however, the
transportation boards or commissions have c l e a r policy- setting
( I
r e s p o n s i b i l i t i e s . -
* Thomas F. Humphrey, Massachusetts I n s t i t u t e of Technology; Bruce
Campbell Vanesse- Hansen Associates; and Kenneth Cook, Transportationv= ( I
Research Board. See Evaluation C r i t e r i a and P r i o r i t y Setting For
S t a t e Highway Programs, National Cooperative Highway Research Program
Report # 84, Transportation Research Board, 1981 and P r i o r i t y
Programming and Project Selection, N. C. H. R. P. R e p o r t # 48,
Transportation Research Board, 1978.
** The s i x s t a t e s reviewed which had no board or commission involved in
highway programming were Florida, I l l i n o i s , New Jersey, Minnesota,
New York and Wisconsin.
Also i n c o n t r a s t with Arizona, agency d i r e c t o r s and commissioners i n o t h e r .
s t a t e s play a strong, c e n t r a l r o l e i n highway programming. In each of the
14 model s t a t e s reviewed, the t r a n s p o r t a t i o n agency d i r e c t o r has f i n a l
a u t h o r i t y and r e s p o n s i b i l i t y f o r departmental programming decisions. For
example, i n Iowa, which has a t r a n s p o r t a t i o n commission, a l l
recommendations t o the commission a r e made through t h e d i r e c t o r . In
I l l i n o i s , which has no commission, the s e c r e t a r y of t r a n s p o r t a t i o n
approves the highway c o n s t r u c t i o n program and presents the program t o the
governor and t h e l e g i s l a t u r e .
Some Statutorv Procedures A r e
Unworkable and Appear Unnecessary
Although current s t a t u t o r y procedures governing highway programming were
intended t o strengthen t h e t e c h n i c a l b a s i s f o r programming and r e s t r i c t
the Board's power t o p o l i t i c a l l y i n f l u e n c e d e c i s i o n s , some procedures a r e
unworkable and appear t o be unnecessary.
Procedures Are Unworkable
L e g i s l a t i v e requirements governing highway programming a r e cumbersome and
unworkable. Three of these requirements, which specify i n d e t a i l the
membership of the P r i o r i t y Planning Committee, r e s p o n s i b i l i t i e s of the
Board and the P r i o r i t y Planning Committee and procedures governing the
Board and Committee's working r e l a t i o n s h i p , a r e discussed below.
Statutory provisions regarding membership of the P r i o r i t y Planning
Committee lack s u f f i c i e n t f l e x i b i l i t y t o promote an e f f i c i e n t programming
process. The Committee c o n s i s t s of ADOT's a s s i s t a n t d i r e c t o r s f o r
highways, public t r a n s i t , aeronautics, a d m i n i s t r a t i v e s e r v i c e s and
t r a n s p o r t a t i o n planning and two department executives appointed by the
Director." The Department found t h a t the top managers on the Committee
were not t h e a p p r o p r i a t e s t a f f t o carry out many of the Committee's
d e t a i l e d work r e s p o n s i b i l i t i e s . These r e s p o n s i b i l i t i e s were delegated t o
subcommittees
* The Directors of the Office of Economic Planning and Development and
the J o i n t L e g i s l a t i v e Budget Committee a l s o serve on the P r i o r i t y
Planning Committee a s nonvoting members. P a r t i c i p a t i o n by the OEPAD
and JLBC D i r e c t o r s , however, has been sporadic and limited i n value.
c o n s i s t i n g mostly of other ADOT managers not on the Committee. Delays
occur and a d d i t i o n a l s t a f f time is required t o carry out some Committee
r e s p o n s i b i l i t i e s because work must be reviewed and approved by both the
subcoimnittees and the Committee before being submitted t o the
Transportation Board.
In a d d i t i o n , the p r i o r i t y r a t i n g formula e s t a b l i s h e d by law has limited
use. A. R. S. $ 28- 111. B. 3. requires t h a t the P r i o r i t y Planning Committee
review any changes i n p r i o r i t i e s requested by the Transportation Board and
make recommendations based on a study of the l e g i s l a t i v e l y e s t a b l i s h e d
c r i t e r i a and r a t i n g formula. Recommendations must be f u l l y documented i n
a w r i t t e n report t o the Board. However, the r a t i n g formula i s applied t o
only 12 percent of ADOT' s t o t a l highway program expenditures ( see Finding
111, page 25). The formula cannot be used t o make major policy decisions
nor t o r a t e most of the p r o j e c t s included i n the highway c o n s t r u c t i o n
program.
F i n a l l y , a major procedural requirement imposed on the Transportation
Board has not worked as intended. The Transportation Board is mandated by
A. R. S. 528- 1825. F. t o require a Planning Committee study before making any
p r i o r i t y project changes. I f it d e v i a t e s from Committee recommendations,
the Board must s p e c i f i c a l l y document the reasons and j u s t i f i c a t i o n s f o r
such deviations i n a w r i t t e n report t o the Director and the Governor. The
Transportation Board however has not complied with t h i s requirement.
Although the Board's noncompliance was i d e n t i f i e d i n an ADOT s t a f f
a n a l y s i s completed i n February 1981, t h i s noncompliance was never
o f f i c i a l l y brought t o the Board's a t t e n t i o n . •
- -
L e e i s l a t i v e Procedures
Appear t o Be Unnecessary
The l e g i s l a t i v e procedures c u r r e n t l y i n e f f e c t appear t o be unnecessary.,= •
A survey of l e g i s l a t i o n i n 14 model s t a t e s disclosed t h a t none have
procedures similar t o Arizona's. Although e i g h t s t a t e s surveyed had a
departmental management committee s i m i l a r t o Arizona's, no s t a t e had
e s t a b l i s h e d the committee, its membership and its procedures i n s t a t e law. •
CONCLUSION
The Transportation Board and ADOT Director do not have adequate c o n t r o l
over highway programming decisions because t h e i r s t a t u t o r y r o l e s a r e
weak. In a d d i t i o n , cum;. - - l e l e g i s l a t i v e requirements a r e unworkable and
appear t o be unnecessary.
UCOFIMENDATIONS
1. A. R. S. $ 28- 106 should be amended t o give the Transportation Board
s p e c i f i c s t a t u t o r y r e s p o n s i b i l i t y and a u t h o r i t y t o e s t a b l i s h p o l i c i e s
t o guide development of the five- year highway c o n s t r u c t i o n program.
2. A. R. S. $ 28- 108 should be amended t o give the ADOT Director s t a t u t o r y
r e s p o n s i b i l i t y f o r developing the highway construct ion program i n
accordance with p o l i c i e s e s t a b l i s h e d by the Board.
3. The P r i o r i t y Planning Committee e s t a b l i s h e d through A. R. S. $ 28- 111
should be eliminated from the s t a t u t e s . The ADOT Director should
e s t a b l i s h a departmental committee a d m i n i s t r a t i v e l y , i f necessary, t o
develop the annual highway c o n s t r u c t i o n program.
FINDING I1
TEE TUNSPORTATION BOARD DOES NOT MVE ADEQUATE IflFOPJ~ UTION lJOR SUFFICIENT
PkOJECT MONITORING AUTHORITY TO PROPERLY FULFILL ITS HIGHFJAY PROGRAMMING
r& SPONSIBILITIES.
The Department of Transportation does not provide s u f f i c i e n t information
to the Transportation Board t o enable the Board t o make well- informed
decisions. The Board does not have adequate program options and
, I.., - --,-.. - .& _ -., lacks informatior. , r: the i- pacts of program p o l i c i e s . In
a d d i t i o n , t h e Board does not have s u f f i c i e n t s t a t u t o r y a u t h o r i t y t o
monitor the s t a t u s of highway p r o j e c t s . As a r e s u l t , the Board cannot
properly f u l f i l l its r e s p o n s i b i l i t y t o determine how up t o $ 1 b i l l i o n i n
highway c o n s t r u c t i o n funds should be spent over the next f i v e years.
Adequate Program Options and A l t e r n a t i v e
Improvement Levels Should Be Developed
The Department of Transportation has not provided the Transportation Board
with adequate program options and a l t e r n a t i v e s . By s t a t u t e , the P r i o r i t y
Planning Committee is responsible f o r recommending annually a five- year
highway c o n s t r u c t i o n program t o the Transportation Board. Generally, the
Committee presents one s e t of recommendations t o the Board r a t h e r than an
array of program options. On occasion, the P r i o r i t y Planning Committee
has presented optional recommendations t o the Board. However, these
options have been limited mainly t- o schedule changes and have n o t u s u a l l y
included a l t e r n a t i v e funding l e v e l s ( based on d i f f e r e n t revenue
assumptions or use of bonding) and a l t e r n a t i v e l e v e l s of improvement.
According t o members of the Committee, recent funding u n c e r t a i n t i e s have
hindered the development of program options. S t a f f e f f o r t s have focused
on determining a v a i l a b i l i t y of funds and funding sources r a t h e r than
preparing v i a b l e program options.
Our observations of Corimittee meetings indicated t h a t r e s t r i c t i v e
l e g i s l a t i v e requirements a l s o d e t e r the Committee from making a l t e r n a t i v e
r e c o ~ e n d a t i o n s t o the Board ( see page 13). For example, a t a meeting on
March 4, 1982, the Committee discussed whether or not the need f o r bonding
t o c-- q? lete the Papago Freeway i n Phoenix ( 1- 10) should be presented t o
the Board. One Committee member argued t h a t it was n o t w i t h i n t h e
Committee's a u t h o r i t y t o recommend new revenue sources t o the Board.
Nevertheless, the matter was eventually brought t o the Board.
National experts on highway programming recommend the development of
program options as is current p r a c t i c e i n some s t a t e s . A l l options should
be analyzed so t h a t decisionmakers understand the major advantages and
disadvantages of each.
In Wisconsin, f o r example, a l t e r n a t i v e program options have been developed
based on varying revenue assumptions. For each program area ( e. g.,
preservation and r e c o n s t r u c t i o n , b r i d g e replacement, i n t e r s t a t e and major
p r o j e c t s ) , low, mid and high program options were developed and
evaluated. Figure 2 shows t h e o p t i o n s developed i n Wisconsin f o r the
preservation and reconstruction category. Under the low revenue
assumption ($ 200 m i l l i o n ) , p r o j e c t s " A" f o r a r e a s 1 and 2, and p r o j e c t s
" B" f o r area 3 were s e l e c t e d . Under the mid ($ 300 m i l l i o n ) and high ($ 400
million) program options, however, d i f f e r e n t p r o j e c t combinations were
s e l e c t e d . The a v a i l a b i l i t y of program a l t e r n a t i v e s allowed Wisconsin t o
compare the l i k e l y impact of funding a l t e r n a t i v e s and enabled
consideration of v a r i o u s t r a d e - o f f s within and among program c a t e g o r i e s . . -
FIGURE 2
PROGRAM AND PROJECT ALTERNATIVES: WISCONSIN
LOW PROGRU
($ 200 million)
2
Districts/ G eographic Area - - - MID PROGRAM
2 3 ($ 300 million)
2
Revenue
Assurp-tlons
L
1 HIGH PROGRXY
A B C A / B ' ($ 400 [ lion) 3
ALTERNATIVE INVESTXENT PROGRAMS
SOURCE: Transportation Research Record # 742,
Transportation Research Board, 1980.
Program options could a l s o be developed varying the scope of improvements
and standards. In Tennessee, a t r a n s p o r t a t i o n needs study was done based
on three system a l t e r n a t i v e s : d e s i r a b l e , AASHTO* and t o l e r a b l e standards.
The d e s i r a b l e system included a supplemental freeway system, whereas the
0
t o l e r a b l e l e v e l only provided f o r improvement of a r t e r i a l routes. Total
c o s t s ranged from $ 13.3 b i l l i o n f o r t h e d e s i r a b l e system t o $ 8.9 b i l l i o n
f o r the t o i e r a b l e system.
Development of more extensive program options i n Arizona would enable the
Transportation Board t o make b e t t e r informed decisions. Programming is a
complex and t e c h n i c a l f u n c t i o n involving an estimated $ 600 m i l l i o n t o $ 1
b i l l i o n over a five- year period. Board members cannot make e f f e c t i v e
decisions and trade- offs among the highest p r i o r i t y needs with only one
set of recommendations.
Information on Policy Impact
Is Lackinn
The Transportation Board a l s o does not have adequate information on the
e f f e c t s of program p o l i c i e s since highway programming procedures do not
include a formal evaluation of policy impacts. As noted i n Finding I,
many program p o l i c i e s have been developed primarily by the P r i o r i t y
Planning Committee or by ADOT s t a f f or a r e i m p l i c i t i n the Department's
t e c h n i c a l r a t i n g formula. These p o l i c i e s range from a major decision t o
give p r e s e r v a t i o n of the e x i s t i n g highway system p r i o r i t y over new
II
c o n s t r u c t i o n to a more recent decision i n 1980 not t o fund r e s t area
improvements.
The impact of program p o l i c y c a n best be i l l u s t r a t e d by using pavement
d
p r e s e r v a t i o n a s a case example. The P r i o r i t y Planning Committee's f i s c a l
year 1982- 83 program was based on a policy t h a t an adequate l e v e l of
pavement preservation should be maintained. Adequate l e v e l was defined t o
mean f u l l preservation*" of high- volume ( over 2,000 average d a i l y t r a f f i c )
@
roads, but l e s s than f u l l p r e s e r v a t i o n of low- volume ( under 2,000 average
* American Association of S t a t e Highway and Transportation O f f i c i a l s
** F u l l preservation r e f e r s t o maintenance of road surface and ride
q u a l i t y i n accordance with standards e s t a b l i s h e d by ADOT.
FIGURE 3
LOW VOLUME ROADS ON THE STATE HIGHWAY SYSTEM
d a i l y t r a f f i c ) roads. Thus, the impact of t h i s policy w i l l be f e l t on
low- volume roads which w i l l not be f u l l y maintained and preserved. As
shown i n Figure 3, these roads a r e a s i g n i f i c a n t p o r t i o n of the t o t a l
S t a t e highway system, representing over 3,000 road miles, and include
roads t o major t o u r i s t a t t r a c t i o n s such a s the Grand Canyon, Tombstone,
Jerome and K i t Peak National Observatory.
ADOT s t a f f involved i n the p r i o r i t y programming process s t a t e d t h a t policy
evaluation is i n t r i n s i c t o preparing each y e a r ' s p r i o r i t y program. The
impact of e x i s t i n g p o l i c i e s a r e discussed and the r e s u l t i n g program
recommendations r e f l e c t e i t h e r a r e a f f i r m a t i o n or a r e v i s i o n of e x i s t i n g
p o l i c i e s . However, a u d i t s t a f f observation of the p r i o r i t y programming
process revealed t h a t t h e s e d i s c u s s i o n s a r e i n t e r n a l t o the s t a f f and may
not be presented t o the Board. Thus, the Board which is r e s p o n s i b l e f o r
the f i n a l d e c i s i o n on the p r i o r i t y program may not be aware of the impact
of e x i s t i n g p o l i c i e s . For example, the p o t e n t i a l h e a l t h hazards of not
funding r e s t area improvements were discussed at the s t a f f l e v e l but not
r a i s e d a s an i s s u e before the Board. The t e n t a t i v e Highway Program was
presented t o the Board assuming a c e r t a i n l e v e l of pavement preservation.
S t a f f a l s o s t a t e d t h a t p o l i c i e s a r e governed by s t a t u t o r y c r i t e r i a which
a r e the b a s i s f o r the t e c h n i c a l r a t i n g formula ( see page 25). However,
the s t a t u t o r y c r i t e r i a a r e broad i n nature and do not preclude an
evaluation of the short- and long- term impacts of program policy.
Board Lacks S t a t u t o r y Authority
t o Flonitor P r o j e c t s
Although Arizona law r e q u i r e s t h e Board t o approve the five- year highway
c o n s t r u c t i o n program and to award c o n t r a c t s , t h e r e is no s t a t u t o r y
requirement t h a t the Board monitor the s t a t u s of p r o j e c t s a f t e r c o n t r a c t s
a r e awarded. As a r e s u l t , the Board is not well informed of the p r o g r e s s
and a c t u a l c o s t s of p r o j e c t s , y e t both progress and c o s t s impact the
v i a b i l i t y and c r e d i b i l i t y of the five- year program. P r- o j e c t s which
overrun schedules and c o s t s eventually r e q u i r e the Board t o change the
program.
P r i o r t o f i s c a l year 1981- 82, the Transportation Board was not involved i n
overseeing implementation of the five- year highway program. Once the
Board approved the program, implementat ion became the s o l e r e s p o n s i b i l i t y
of t h e o p e r a t i o n a l d i v i s i o n s within ADOT. In a d d i t i o n , although
r e s p o n s i b i l e f o r awarding c o n t r a c t s , the Board d i d n o t monitor a c t u a l
c o n s t r u c t i o n c o s t s of p r o j e c t s and a l l c o n s t r u c t i o n change orders were
made without Board approval.
In f i s c a l year 1981- 82, e f f o r t s were made t o involve the Board i n the
monitoring of p r o j e c t s . Major change orders i n c o n s t r u c t i o n c o n t r a c t s a r e
now approved by the Board, and a s of January 1982, q u a r t e r l y progress and
cost reports a r e prepared f o r Board review. However, the Board has not
been a s s e r t i v e i n requesting s t a t u s r e p o r t s and follow- up information from
ADOT s t a f f because project monitoring is not an o f f i c i a l Board
r e s p o n s i b i l i t y .
A n a t i o n a l study of state procedures recommends t h a t p r o j e c t monitoring be
included i n highway programming. Some s t a t e s , such as Louisiana and New
York, have incorporated monitoring of p r o j e c t implementation i n t o the
programming process. In these states, the e n t i t y responsible f o r
developing the highway program is a l s o responsible f o r overseeing its
implementation. Board members interviewed during our a u d i t a l s o s t a t e d
t h a t project monitoring should be part of the Board's o f f i c i a l
r e s p o n s i b i l i t i e s t o ensure t h a t the five- year program is a viable and
e f f e c t i v e document.
CONCLUSION
The Transportation Board does not have adequate program options and
information on the impacts of program policy t o enable it t o make
well- informed highway programming decisions. In a d d i t i o n , the Board lacks
adequate a u t h o r i t y t o monitor the s t a t u s of p r o j e c t s .
1. S t a f f recommendations made t o the Transportation Board should include
an adequate array of program options. The major advantages and
disadvantages of each option should be analyzed t o enable the Board t o
make well- informed decisions.
2. The highway programming process should include an evaluation of the
impact of e x i s t i n g program p o l i c i e s . This evaluation should be
conducted e a r l y i n the programming process and r e s u l t s should be
presented to the Transportation Board f o r c o n s i d e r a t i o n i n developing
the annual program.
3. A. R. S. $ 28- 106. C. should be amended t o include the monitoring of
p r o j e c t s t a t u s a s a Board r e s p o n s i b i l i t y .
FINDING 111
THE DEPAIITMENTIS STATUTORY, TECHNICAL RATING FORMULA HAS LIMITED UTILITY
FOR ESTABLISHING PROJECT PRIORITIES AND COULD BE SIMPLIFIED.
As part of our a u d i t , we contracted with Cambridge Systematics, I n c . , a
t r a n s p o r t a t i o n c o n s u l t i n g f i r m , f o r a s s i s t a n c e i n evaluating the
s t a t u t o r i l y required t e c h n i c a l r a t i n g formula. Results of the Cambridge
Systematics study and our own evaluation i n d i c a t e t h a t the formula i s
limited i n its u t i l i t y and could be simplified.*
Rating Formula Is
Required By Law
Arizona Revised S t a t u t e s 528- lll. B. l. requires the P r i o r i t y Planning
Committee to " e s t a b l i s h a r a t i n g formula f o r s e t t i n g p r i o r i t i e s on
t r a n s p o r t a t i o n f a c i l i t i e s c o n s t r u c t i o n projects."
C r i t e r i a t o be considered i n developing the formula include the following
12 f a c t o r s :
- Sufficiency r a t i n g ( road c o n d i t i o n ) ,
- User b e n e f i t s ,
- Economic f a c t o r s ,
- Continuity of improvement, .
- Social f a c t o r s ,
- Land use,
- Aesthetic and environmental f a c t o r s ,
- Conservation f a c t o r s ,
- Safety f a c t o r s ,
- Life expectancy,
- Recreational f a c t o r s , and
- A v a i l a b i l i t y of S t a t e and Federal funds.
* For a summary of the Consultant Report, see Appendix I.
To comply with t h i s requirement, the Department has developed a 200- point
r a t i n g system which includes the following elements:
- A s u f f i c i e n c y r a t i n g which a s s e s s e s
road condition, s a f e t y and s e r v i c e 100
- An economic r a t i n g 6 5
- A t r a f f i c s a f e t y r a t i n g 2 5
- An environmental r a t i n g - 10
Total Points - 200
Arizona was the f i r s t s t a t e t o formally use s u f f i c i e n c y r a t i n g s i n p r o j e c t
s e l e c t i o n beginning i n the late 1940s.
Formula Has Limited U t i l i t y
Although t h e t e c h n i c a l r a t i n g formula is c o n s i s t e n t with n a t i o n a l 9
standards and p r a c t i c e s and can be a u s e f u l t o o l f o r project s e l e c t i o n , it
has s e v e r a l disadvantages:
- Application of the formula is limited t o l e s s than 12 percent of
the t o t a l ADOT highway program budget ; JL
- The formula cannot be used t o evaluate trade- offs between
d i f f e r e n t l e v e l s of s e r v i c e , d i f f e r e n t funding c a t e g o r i e s ( new
c o n s t r u c t i o n vs. r e h a b i l i t a t i o n ) and urban and r u r a l needs;
- The economic portion of the r a t i n g is l i m i t e d i n scope and does
not provide an o v e r a l l assessment of c o s t e f f e c t i v e n e s s ;
- The environmental r a t i n g , 10 points assigned on an " a l l or
nothing" b a s i s , is even nore limited than the economic r a t i n g i n
its scope and influence;
- There a r e few o p p o r t u n i t i e s f o r policy input i n developing
scores, and policy choices which should be decided by the
Transportation Board a r e obscured by the formula;
- Some i n t a n g i b l e , nonquantifiable f a c t o r s a r e not considered,
which l i m i t s f l e x i b i l i t y .
- The impact of various l e v e l s of investments and t h e i r r e l a t i v e
c o s t e f f e c t i v e n e s s is not analyzed, both o v e r a l l and f o r
i n d i v i d u a l p r o j e c t s ; and
- The formula cannot be used t o evaluate new highway c o n s t r u c t i o n
p r o j e c t s .
Three major disadvantages are discussed in more d e t a i l below:
1. Use of Formula Is Limited to 12 Percent of ADOT Highway Budget
Use of the s t a t u t o r i l y required rating formula in s e l e c t i n g p r o j e c t s
f o r the p r i o r i t y program is limited to a r e l a t i v e l y small proportion
( l e s s than 12 percent) of ADOT's t o t a l highway funds. Only major
reconstruction projects on the S t a t e ' s primary and secondary systems
are subject to the rating formula. Bridge p r o j e c t s a r e rated by a
formula developed by the Federal Highway Administration and pavement
preservation projects are rated by ADOT's Pavement Management System
( PMS) . New construct ion, landscaping and i r r i g a t i o n projects and
i n t e r s t a t e projects are not subject to any t e c h n i c a l r a t i n g system.
A l l of these types of p r o j e c t s , however, are included i n the five- year
program.
Even within the Federal Aid Primary Category*, rated projects must
compete with unrated projects. As a r e s u l t , only one rated project
costing $ 3,700,000 was actually recommended by the Planning Committee
f o r construction during the f i r s t year of the f i s c a l year 1982- 83
program.**
Our observation of the programming process indicates t h a t the r e s u l t s
of the technical ratings are more useful i n screening out p r o j e c t s
rather than for s e l e c t i n g p r o j e c t s to be included i n the highway
construction program. Projects which f a l l below a minimum r a t i n g
score are eliminated from consideration.
-
* Federal funds set aside f o r construction work on the S t a t e ' s major
. a r t e r i a l routes such as U. S. 60 rand Ave.) and U. S. 89 ** Two rated projects have p r i o r i t y to move i n t o the f i s c a l year 1982- 83
program if funds become available.
2. Technical Rating Formula Cannot Address Important Policy Issues
Technical rating systems cannot adequately address important policy
considerations and other f a c t o r s which are not quantifiable i n
nature. Overreliance on technical ratings can r e s u l t in decisions
unacceptable to top ADOT Management and the Transportation Board.
The case example cited e a r l i e r on page 8 i l l u s t r a t e s t h i s point. The
P r i o r i t y Planning Committee attempted to r a t e and compare the
Superstition Freeway Project to other primary system projects but was
unable to do so. The project was not included i n the t e n t a t i v e
program f o r f i s c a l year 1982- 83 approved by the Committee on March 4,
1982.
In omitting the Supersit it ion Freeway p r o j e c t , t h e Committee r i g i d l y
attempted to quantify a l l relevant f a c t o r s and, i n the process,
ignored c r i t i c a l policy considerations. As a r e s u l t , the c r e d i b i l i t y
of both the Committee's recommendations and the highway programming
process was questioned. One Transportation Board member s t a t e d t h a t
he " doubted" the process which resulted i n the Committee's f i r s t
program. Credibility and use of the technical rating formula have
also been questioned by other Board members, ADOT s t a f f and local
government representatives.
The Formula Cannot Identify System- Wide Needs
Another l i m i t a t i o n of t h e t e c h n i c a l r a t i n g formula is that project
ratings can n e i t h e r p r e d i c t t h e b e n e f i t s of various levels of
improvement nor identify system- wide needs f o r planning purposes.
Ratings apply primarily to physical conditions on site- specif i c ,
existing primary and secondary systems roads. Ratings indicate only
that a problem e x i s t s within a small portion of the t o t a l State
highway sy s tem.
Thus, any changes i n the r a t i n g formula need t o be coordinated with a
more comprehensive s e t of programming procedures. These procedures
should consider the e n t i r e S t a t e highway system and various
c a t e g o r i c a l and other program trade- offs which must be made by the
Transportation Board and the Department.
The Formula Can Be Simplified
The Cambridge Systematics study concluded t h a t t h e formula could be
s i m p l i f i e d by 1) eliminating the environmental r a t i n g , 2) combining the
t r a f f i c s a f e t y r a t i n g with the s u f f i c i e n c y r a t i n g , and 3) dropping the
economic r a t i n g and replacing it with a more comprehensive economic
b e n e f i t s analysis.
The t e c h n i c a l r a t i n g formula used by ADOT was developed t o s a t i s f y
d e t a i l e d requirements and c r i t e r i a e s t a b l i s h e d by law. These requirements
r e s t r i c t f l e x i b i l i t y and appear t o be unnecessary. A survey of
L e g i s l a t i o n i n 14 model s t a t e s revealed t h a t only 6 provide f o r a
t e c h n i c a l r a t i n g system by s t a t u t e . None of t h e s t a t e s , however, has
d e t a i l e d s t a t u t o r y requirements i n c l u d i n g a t e c h n i c a l r a t i n g formula
s i m i l a r t o Arizona's.
ADOT has proposed t h a t s t a t u t o r y c r i t e r i a be retained i n the s t a t u t e s but
t h a t the Transportation Board and ADOT Director be given d i s c r e t i o n a r y
a u t h o r i t y and f l e x i b i l i t y i n applying these c r i t e r i a . Inf ormal
discussions with L e g i s l a t i v e Council s t a f f indicated t h a t i n giving the
Board more f l e x i b i l i t y , r e t a i n i n g s p e c i f i c c r i t e r i a i n law may be
p r e f e r a b l e t o deleting the c r i t e r i a e n t i r e l y from the s t a t u t e s since the
l a t t e r approach could leave the ~ o a r d ' s a u t h o r i t y open t o possible l e g a l
challenge as a vague and improper delegation of a u t h o r i t y .
As part of its review, Cambridge Systematics compared Arizona's technical
rating formula to systems used i n three model programming s t a t e s : Iowa,
I l l i n o i s and Wisconsin. Results indicated t h a t procedures i n these s t a t e s
are more f l e x i b l e and more s e n s i t i v e to important policy considerations.
In Iowa, f o r example, economic and environmental f a c t o r s are treated as
policy issues r a t h e r than reduced to numerical ratings. In I l l i n o i s road
condition data are used to develop information and options helpful to
top- level policy makers. These data are not used to develop a numerical
sufficiency rating.
CONCLUSION
ADOT's t e c h n i c a l r a t i n g formula used in highway programming is
unnecessarily complex and can be simplified. The formula is limited to
rating only major reconstruction projects and can obscure important policy
considerations when r i g i d l y applied.
1. The technical rating formula should be simplified by dropping the
economic and environmental portions of the formula and consolidating
the t r a f f i c s a f e t y r a t i n g with the s u f f i c i e n c y r a t i n g .
2 . Social, economic and environmental f a c t o r s should be treated as policy
issues to be considered by the Transportation Board as part of the
highway programming process.
3. A more comprehensive economic benefits analysis should be developed
separate from the technical r a t i n g formula. ( I
- -
4. A. K. S. $ 28- lll. B. l. should be amended to give the Transportation Board
and MOT Director more d i s c r e t i o n a r y a u t h o r i t y and f l e x i b i l i t y in
applying the s t a t u t o r y c r i t e r i a i n the Highway Programming Process. . - a
FINDING I V
THE TRANSPORTATION BOARD AND THE PRIORITY PLANNING COMMITTEE DID NOT FULLY
COPiPLY WITH TIiE OPEN hlEETING LAW PRIOR TO OUR AUDIT.
Work sessions held before, and sometimes a f t e r , the public meetings of the
Transportation Board did not f u l l y comply with the Open Meeting Law.
P r i o r i t y Planning Committee meetings a l s o v i o l a t e d the Open Meeting Law
s i n c e n o t i c e s of meetings were not posted. Both the Transportation Board
and the Committee have since taken c o r r e c t i v e a c t i o n and have gone beyond
the l e g a l requirement t o s o l i c i t public and l o c a l government p a r t i c i p a t i o n
i n the p r i o r i t y programming process.
Transportation Board Did Not Fully
Comply with the Open Meeting Law
The Transportation Board has t r a d i t i o n a l l y held a " work session" before,
and sometimes a f t e r , its r e g u l a r p u b l i c meetings. The primary purpose of
each work session was t o keep Board members infornled on t r a n s p o r t a t i o n
i s s u e s , many of which did not f a l l within the Board's o f f i c i a l scope of
a u t h o r i t y ( e. g. Department budget m a t t e r s ) .
Work sessions however, did not f u l l y comply with the Open Meeting Law
( A. R. S. 938- 431 - et. - seq.) . Public n o t i c e s indicated t h a t the work
sessions were " informal study sessions a t which no a c t i o n would be
taken." However, the Board, a t times, took a c t i o n s i n work sessions by
d e l i b e r a t i n g and reaching consensus on t r a n s p o r t a t i o n i s s u e s scheduled or
expected t o come before the Board f o r a vote i n o f f i c i a l sessions. - -
According to an opinion of the L e g i s l a t i v e Council dated March 23, 1982,
these c o l l e c t i v e decisions and d e l i b e r a t i o n s c o n s t i t u t e " l e g a l actions"
subject t o the provisions of the Open lleeting Law: v -
" As used i n the open meeting law, the term l e g a l a c t i o n
should be construed broadly and is not only the mere
formal a c t of voting but includes discussions and
d e l i b e r a t i o n s by members of the public body p r i o r t o
the f i n a l decision. 75 Op. Attorney General No. 8
( 1975- 1976)."
During the course of our a u d i t , the Transportation Board eliminated the
use of work sessions and now conducts a l l business i n o f f i c i a l Board
meetings. a
P r i o r i t y Planning Committee
Was Also i n Violation
The P r i o r i t y Planning Committee, e s t a b l i s h e d by A. R. S . $ 28- 111 and ( I
c o n s i s t i n g primarily of ADOT d i v i s i o n a l managers, did not comply w i t h t h e
Open Meeting Law a t the time of our a u d i t . In an opinion dated
January 20, 1982, the L e g i s l a t i v e Council s t a t e d t h a t the P r i o r i t y
Planning Committee was subject t o the requirements of the Open Meeting Law:
" The d e f i n i t i o n of ' public body' f o r purposes of the
so- called ' open neeting l a w ' includes a ' standing,
s p e c i a l or advisory committee' of a board which is
supported by or which expends tax revenues. The
t r a n s p o r t a t i o n board is supported by and expends tax
revenues ( see, e. g., A. R. S. $ 28- 105), and since the
committee is an adjunct of the board, it f a l l s within
the d e f i n i t i o n of ' public body.' The committee is,
theref ore, subject t o t h e s u b s t a n t i v e and procedural
requirements of the open neeting law, including public
notice ( A. R. S. $ 38- 431.02) and w r i t t e n minutes ( A. R. S.
$ 38- 431.01) of meetings."
The Committee, however, n e i t h e r posted r e q u i r e d p u b l i c n o t i c e s nor took
adequate minutes of its meetings.
( I
In February 1982, the Committee took c o r r e c t i v e a c t i o n and now posts - -
notice and takes minutes of a l l meetings.
Local Government and Public Input into
Priority Programming Was Increased
Prior to fiscal year 1981- 82, public and local government participation in
the priority programming process was limited since the Priority Planning
Committee was not posting public notice and notifying interested agencies
of its meetings. In addition to taking corrective action to comply with
the Open Meeting Law, the Committee, with approval of the Board, has taken
additional steps to encourage local government participation in the
priority programming process. All Councils of Governments within the
State ( regional associations of local governments) are now informed of all
Committee meetings, and have an opportunity to review committee decisions
and recommendations before they are finalized by the Board.
CONCLUSION
Both the Transportation Board and the Priority Planning Committee did not
fully comply with the Open Meeting Law prior to our audit. Corrective
action has since been taken.
RECOMbLENDATIONS
1. The Transportation Board should continue to comply with all
requirements of the Open Meeting law and consult routinely with the
Assistant Attorney General assigned to ADOT when questions regarding
compliance arise.
2. The Department should continue to encourage local government
participation in the priority programming process.
AREAS FOR FURTHER AUDIT WORK
Our review of the Highway Programming Process resulted from preliminary
work on the Department's Transportation Planning Division which staffs the
highway programming function.
During the course of this preliminary work, we identified several
potential areas for further audit work in the Planning Division. These
areas, which were outside the scope of our audit ( see page 41, are as
follows:
- Whether the staffing level of the Planning Division is adequate
and appropriate,
- The need for a separate cost accounting system in the
Transportation Planning Division, and
- Whether the local government assistance functions in the Planning
Division should be consolidated with related functions in other
ADOT Divisions.
B
ARIZONA DEPARTMENT OF TRANSPORTATION
206 South Seventeenth Avenue Phoenix, Arizona 85007
b BROCE EABBITT
Governor
October 18, 1982 WILLIAM A. ORDWAY
D~ rector
Mr. Douglas R. Norton
Auditor General
111 West Monroe, Suite 600
Phoenix, Arizona 85003
I .
Dear Doug,
Thank you for the opportunity to review the revised preliminary report
draft of the performance audit of the Arizona Department of Transporta-tion's
Highway Programming Process. I would again like to commend your
staff for the fine job they did on this audit in the short time they had
to do the work. As I indicated in an earlier l e t t e r , many of their sug-gestions
fall right in line with our more recent efforts to improve the
process. We a1 so appreciate the constructive discussion of the f i r s t
draft we had with your people.
The attached comments are provided to reflect our views on the report
findings. One overall comment i s provided as well as comments on each
major finding. I t i s my understanding that these comments will be ap-pended
t o your final report.
Thanks again for the opportunity t o comment and for the very profes-sional
manner in which your staff conducted themselves throughout the
course of the audit.
Sincerely ,
W . A. ORDWAY
Director
WAO : vn
cc: Transportation Board Members
Executive Committee Members
HIGHWAYS - CER0NAUT: CS MOTOR VEHICLE PUBLIC TRANSIT ' ADMINISTRATIVE SERVICES ' TRANSPORTATlOfJ PLANNING
ADOT'S COMMENTS ON AUDITOR GENERAL'S PERFORMANCE AUDIT
OF THE ARIZONA DEPARTMENT OF TRANSPORTATION'S
HIGHWAY PROGRAMMING PROCESS
We suggest the report provide more background on Board and staff work
which had already identified many of the ideas outlined in your report
for improving the Priority Planning Process. ADOT began l a t e in 1980
a concerted e f f o r t t o identify opportunities for improving the process.
A number of issue papers were developed, and by early 1982 the Priority
Planning Committee and the Transportation Board had approved a formal
set of Priority Planning Process policies. Examples of these policies
include:
1. Early involvement by the Transportation Board and the
Director i n program di rection setting ;
2. Alternatives on such items as pavement preservation
levels, Interstate completion funding, and the use of
bonding to supplement the construction program revenues;
3. Strengthened public participation in the programming pro-cess.
Board and staff strongly support t h i s e f f o r t t o improve the Priority
Planning Process within the existing s t a t u t e s . During the l a s t program
cycle, we have successfully implemented many of these improvements which
included some suggested in your report. We also are working hard to im-prove
the process for next year's program.
FINDING I - BECAUSE OF WEAK STATUTORY ROLES, THE TRANSPORTATION BOARD AND
THE ADOT DIRECTOR DO NOT HAVE ADEQUATE CONTROL OVER HIGHWAY PROGRAMMING
DECISIONS.
ADOT POSITION - PARTIALLY CONCUR \! ITH FINDIb! G
While we agree with the audit recommendation that statutory authority
regarding program development should be clarified for both the Board and
Director, we do not share the conclusion that the Transportation Board
and Director currently are not exercising adequate control over highway
program decisions. Roles have and continue to evolve for a l l partici-pants
in the process. When the current statutes were f i r s t enacted, the
process tended to be highly technical in nature, b u t over the years the
involvement of both the Transportation Board and Director has increased
continually with major policy decisions being important to the continued
improvement of the program. Documentation of t h i s involvement has been
poor until recently. . -
Under existing s t a t u t e s , the Board has broad powers with respect to pro-gram
development. I t has the specific authority to approve- and adopt the
Five- Year Priority Program and to award a l l construction contracts for
transportation f a c i l i t i e s . The statutes a1 so are quite c l e a r t h a t the
Priority Planning Committee i s in the role of making construction project
ADOT'S COMMENTS - Auditor General's Audit Sheet 2
priority recommendations to the Board, b u t does not have the final
decision on those recommendations. While the Board currently has the
authority to control the highway construction program project decisions,
and while i t no!./ sets more definitive and formal program policies than
in the past, Board members are nevertheless uncomfortable with current
statutes. We agree i t will he1 p to give the Board clear authority t o
establish policy that governs the program along with clear authority to
monitor the program's status. While we implicitly believe the Director
also has authority t o control the Highway Program, we agree that clari-fying
the statutes as recommended in the report i s a good recommendation
Our improved and formal ized Priority Planning Process pol icies mentioned
above clearly define a further strenn4? ened role for the Director and the
Board in setting program direction early in the programming process. The
Board is expected to approve the program policy direction, and the a
Di rector i s to review a1 1 the Priority Pl anni ng Comrni ttee' s recornmenda-tions
before they go t o the Board. Again, the recommended statutory
clarification will be helpful t o these efforts.
FINDING I1 - THE TRANSPORTATION BOARD DOES NOT HAVE ADEQUATE INFORMATION
NOR SUFFICIENT PROJECT MONITORING AUTHORITY TO PROPERLY FULFILL ITS HIGH-a
- - . -.
WAY PROGRAMMING RESPONSIBILITIES.
ADOT'S POSITION - PARTIALLY CONCUR WITH FINDING
We agree that clarification of the statutes regarding monitoring authority
would be helpful, b u t the issue of whether the Board currently has adequate
I
program options and alternatives and lacks information on the impacts of
program policies is a matter of judgment. As stated in our comments under
Finding I , the whole priority program process has been evolving with con-trol
and information improving gradually for the f i r s t several years, and
significantly in recent years. Department staff and the Transportation I
Board are working closely together t o assure t h a t the Board does have
adequate program options and information on the impacts of program policy
t o enable i t to make we1 1 - informed highway programming decisions.
The Board plans to spend more time on programming issues to assure full
understanding and we intend to improve the methods of the s t a f f ' s pre-sentation
of material t o the Board. We think that we are making some
major strides forward in these areas.
As far as program monitoring is concerned, the Board receives monthly
highlights, quarterly status reports, and an annual report regarding
the program. Also, staff currently is developing a monthly project , - =
cost status report at the Board's request.
ADOT'S COMMENTS - Audi tor General ' s Audit Sheet 3
We agree with the recommendation that A. R. S. 28- 111.8.1 should be amended t o
give the Transportation Board and the ADOT U i rector more discretionary
authority and f l e x i b i l i t y in applying the statutory c r i t e r i a i n the Highway
Programming Process. We a1 so want to emphasize the need for the statutes t o
retain a broad 1 i s t of c r i t e r i a to be considered. Our principal reason for
supporting retention of the c r i t e r i a i n the statutes goes back to the basic
reasons for the existing process and technical c r i t e r i a . The current statutes
are the result of perceived abuses of the project selection process, which
resulted in poor program s t a b i l i t y . I f the statutes are c l a r i f i e d and
simplified, i t i s imperative that an appropriate balance of policy and
technical considerations be retained. Possibly the current process has seen
the swing of the pendulum too far to the technical side, but care should be
taken that i t not swing back too far the other way either and throw out what
has been gained.
FINDING IV - THE TRANSPORTATION BOARD AND THE PRIORITY PLANNING COMMITTEE DID
NOT FULLY COMPLY WITH THE OPEN MEETING LAN PRIOR TO OUR AUDIT.
ADOT'S POSITION - CONCUR WITH FINDING
- -
We would l i k e t o point out that pub1 ic notices for the Transportation Board's
work sessions ( now no longer used) were posted in advance. The sessions were
open t o the public and press, and minutes were taken.
@ ARIZONA DEPARTMENT OF TRANSPORTATION
206 South Seventeenth Avenue Phoenix, Arizona 85007
* 191 *
BRUCE BABBITT
Governor
October 18, 1982
WILLIAM A ORDWAY
D~ rector
Mr. Douglas Norton
Auditor General
111 West Monroe, Suite 600
Phoenix, Arizona 85003
TRANSPORTATION BOARD
R. R. " Bob" Evans
Chairman
Lawrence M. Hecker
Vice Cha~ rman
John W. McLaughlin
Lynn M. Sheppard
Hal F. Butler
Sondra Eisberg
Ted Valdez, Sr.
Dear Mr. Norton,
The State Transportation Board accepts the recommendations of the re-vised
draft which followed our September 30 meeting with members of
your staff.
We s t i l l do not believe this draft reflects two important issues:
f i r s t , that some of the recommendations were being corrected at the
time of the audit and, second, the draft f a i l s t o recognize the un-usual
conditions that existed during the reporting period. This was
brought about by the recent tax legislation, the proposed referendum
t o repeal the gas tax, and the uncertainty as to the continuity of
Federal highway 1 egi sl ati on, as we1 1 as Federal ob1 i gati on 1 eve1 s.
As expressed in our September 30 meeting, I do feel that a construc-tive
atmosphere certainly existed between our Board Members and your
staff.
BSincPere+ ly , 2, fGd zYL&-
R. R. EVANS
Chai man
RRE : bg
cc: W. A. Ordway
HIGHWAYS AERONAUTICS MOTORVEHICLE PUBLICTRANSIT ADMINISTRATIVESERVICES TRANSPORTATIONPLANNING
APPENDIX I
CONSULTANT EVALUATION OF THE ADOT
PRIORITY fWTING FORMULA
Evaluation of the Adequacy of the Highway
Priority Rating Formula Used By the
Arizona Department of Transportation
Prepared for
The Arizona Office of the Auditor General
Prepared by
CAMBRIDGE SYSTEMATICS, INC.
238 Main Street
Cambridge, Massachusetts 02142
with assistance from
Vanasse- Hangen Associates
184 High Street
Boston, Massachusetts
Final Report
June 2, 1982
EXECUTIVE SUMMARY
Overall Conclusions
The development of a yearly highway c a p i t a l and maintenance program is
a d i f f i c u l t and complex task. It is d i f f i c u l t because the supply o f a v a i l -
able resources is usually much smaller than the demand f o r improvements. It
is complex because there a r e so many f a c t o r s t h a t must be considered i n
equitably a l l o c a t i n g scarce resources each year.
There a r e a t l e a s t one dozen highway program c a t e g o r i e s f o r which spe-c
i a l l y earmarked funds, both s t a t e and f e d e r a l , a r e a v a i l a b l e each year in
Arizona. The p r i o r i t y r a t i n g formula discussed i n t h i s r e p o r t is applied t o
only two of those highway c a t e g o r i e s , the primary s t a t e system and the se-condary
s t a t e system ( but only 50 percent of t h a t system).
The t o t a l projected highway fund revenues f o r FY1983 is approximately
$ 361,170,000, of which about $ 138,229,000 is d i r e c t l y a v a i l a b l e to ADOT f o r
highway programs under i t s j u r i s d i c t i o n . Of t h a t amount, only about
$ 17,386,000 i s projected to be a v a i l a b l e f o r s t a t e primary and secondary
system p r o j e c t s t h a t a r e s u b j e c t to the p r i o r i t y r a t i n g formula. This
amounts t o l e s s than 12.5 percent of the ADOT construction budget, s i n c e n o t
a l l ~ e d e r a l - a i d primary p r o j e c t s are rated, and l e s s than 5 percent of the
t o t a l highway fund.
Thus, the evaluation of the p r i o r i t y r a t i n g formula must be placed i n . -
i t s proper perspective. It i s a useful and o b j e c t i v e a n a l y s i s t o o l , but i t
is only one part of the o v e r a l l s e t of procedures used t o e s t a b l i s h p r i o r i -
t i e s for the highway construction and maintenance program. Other p r i o r i t y
' r a t i n g procedures, some comprehensive but others perhaps l e s s so, a r e used
by n e c e s s i t y f o r over 80 percent of the t o t a l highway program.
A major i s s u e t h a t must be considered i n evaluating the process used t o
e s t a b l i s h highway program p r i o r i t i e s is the manner i n which - a l l those pro-grams
a r e eventually combined i n t o a s i n g l e package of highway p r i o r i t i e s .
That s e r i e s of a c t i o n s , which r e s u l t s i n t h e p r e p a r a t i o n and eventual publi- ( I
cation o f t h e 5 Year Construction Program, i s the culmination of a long ser-i
e s of a c t i v i t i e s t h a t a r e mandated by S t a t e and Federal laws and regula-t
i o n s .
While there a r e s p e c i f i c changes or modifications t h a t might be consid-
' ered to t h e c u r r e n t p r i o r i t y formula, we would s t r o n g l y suggest t h a t they
only be considered i n the context of a broader review o f t h e e n t i r e program-
( I
ming process. The top p r i o r i t y for ADOT may well be longer term improve-ments
t o the process for developing the o v e r a l l program r a t h e r than immedi-a
t e changes t o the p r i o r i t y formula used f o r a r e l a t i v e l y small poftion of
t h a t program.
The P r i o r i t y Rating Formula •
The d e t a i l e d evaluation of the p r i o r i t y r a t i n g formula is contained i n
Section 2.0 of t h i s report. The ADOT procedure is compared t o three " bench-mark"
s t a t e s i n s e c t i o n 3.0. We have responded to the f i f t e e n questions
raised by the Auditor General i n Section 4.0. Based upon our review, we
conclude:
I. The c u r r e n t p r i o r i t y r a t i n g formula does provide an adequate todl
t o a s s i s t i n e s t a b l i s h i n g reconstruction p r i o r i t i e s on the Primary and Se-
<
condary s t a t e highway systems. It a l s o appears t o meet the s p i r i t and in-t
e n t of t h e v a r i o u s Arizona Revised S t a t u t e s t h a t mandate i t s use.
2. The formula could be simplified and probably result in basically
the same results, keeping in mind that it is applied to only about 12 per-cent
of the total ADOT construction program. The simplification could take
place by:
- Dropping the environmental factor completely, and using a flag-ging
procedure when a potential project might be affected by its
environmental impacts;
- Combining the traffic safety factor with the sufficiency rating;
- simplifying the economic rating, or dropping the current proced-ure
and replacing it with a more comprehensive analysis of needs
within the framework of the total statewide transportation pro-gram.
,3. Arizona is among a handful of states that use a priority rating
formula as the primary basis for selecting certain projects. . The Planning
Division feels that the Department has depended upon the formula for making
programing decisions, regardless of opposition that might occur. However,
there is no guarantee that this traditional approach will continue to remain
as firm, because of growing concern in the Legislature with ADOT'S program-ming
process and increased pressures for a more comprehensive assessment of
total transportation needs. In fact, many states are now rejecting a strict
formula approach as too rigid and unresponsive to a range of critical policy
issues which must be addressed.
4 . Although key ADOT personnel who were interviewed felt that the De-partment
does not feel overly constrained by the rigidity of the current
procedures, a potential emerging problem might be the tendency of the Legis-lature
to mandate more restrictive programs or program categories ( such as
the 15 percent set- aside for non- Interstate freeways in Phoenix and
Tuscon). In fact, these Legislative restrictions may reflect a concern by
some outside the Department that the current formula is indeed too rigid to
address key policy issues. The Department should respond to this concern by
imbedding technical priority procedures within a much broader programing
process that explicitly examines the mix of project types ( resurface, recon-struction,
new construction, etc.) and geographic allocation of funds. If .
the trend toward more Legislative constraints continues, it will diminish
the ability of the Department to address issues concerning the " bigger pic-ture"
of total transportation needs.
5 . The current priority rating formula does not provide the ability to ad-dress
program tradeoffs such as:
- urban vs. rural
- new construction vs reconstruction vs. other levels of improvement
- corridor, regional or statewide social, environmental or economic
impacts
6 . There is some uncertainty concerning the points at which policy
considerations are inserted into the priority making process. However, it
should be emphasized that the current formula does represent a very explicit
policy statement concerning project objectives and priorities. The credi-bility
of the formula will depend on the extent to which the policy position
that the formula represents is understood and supported. While currently
the Planning Department feels that the formula is credible, the complexity
of the approach makes it very difficult to really understand the policy in-plications
of the rating method without a detailed understanding of the corn-.
ponents of the formula. Clearly many individuals within the Department do
not have such a detailed understanding of the approach. In any case, if new
policies are to be evaluated periodically, the formula will have to be sd-justed
and a more flexible approach to setting priorities may be desirable.
There does appear to be some acknowledgement of this concern, and efforts
are now being made by ADOT to make this policy input more explicit.
7. On balance, it is our opinion that ADOT applies the priority rating
formula in a professional manner, is aware of the deficiencies rn the
process, and is working to address those problems. The ADOT top management
also recognizes the importance of developing priorities for all the many
different program categories within the context of total program needs.
Recommendat ions
ADOT recognizes the necessity for developing a longer term transporta-tion
plan that gives broader consideration to the social, environmental and
economic impacts of the total transportation system. The Advanced Planning
Section of the Division of Transportation Planning is in the process of de-veloping
analytical tools that will assist in achieving those objectives.
It is also our understanding that the Division is developing procedures to
assist in linking the 5 Year Highway Program to a longer range plan. By do-ing
this it will become more reasonable to evaluate both short and Long term
priorities within the context of total statewide, corridor and regional
needs.
This is definitely a step in the right direction, which should be pur-sued
vigorously. However, in order to avoid any unnecessary constraints on
that process it would be prudent to avoid establishing any further con-straints
on the overall highway priority programming process. ADOT should
be given the flexibility to allow it to determine how to evaluate the dozen ,=
or more programs that now comprise the total state highway system, and how
the sorewhat fragmented approach currently used can be combined into a more
coherent set of procedures.
A critical component of a more comprehensive programming process will
be a clear understanding of the roles of the Department, Transportation e
Board, and Legislature in setting policy and making final program and pro-ject
choices. While clear policy direction is an important ingredient in an
effective programming process, the process itself should be used to expli-citly
examine different policy options before final policy directives are
set. By examining the tradeoff between different allocations of funds to
program areas, types of projects, and geographic areas, ADOT can play a cen- a
tral role in assisting all the appropriate groups set overall highway in-vestment
policy.
In short, we recommend that the Department undertake a comprehensive
review of all its programming and priority setting functions and establish a
more integrated approach to setting priorities in all program areas. Any
approach that is developed should be reviewed and revised as appropriate on •
an annual or biennial basis. It is in the context of such a review that we
would also recommend some specific changes to the priority formula as dis-cussed
above.