Our Perspective: Transportation

Shifting to High Gear

Emerging technologies and resulting disruptions will affect the entire transportation landscape, requiring a fresh perspective and a reimagining of infrastructure, transport and the regulation and use of innovations. Cities, states and public agencies must modernize infrastructure to accommodate impending changes while continuing to rebuild, repair and revitalize existing infrastructure to meet growing needs.

Effective planning will require balancing competing interests with safe integration of rapidly evolving technologies into infrastructure projects. With limited funding and increased competition for infrastructure dollars, new technologies and data analysis offer the opportunity to prioritize spending on maintenance needs, smart investments in new innovations and the building of new smart infrastructure. New policies promoting innovation must reflect how communities should be structured, and how public transportation networks can leverage technologies to optimize public transportation use and access, improve efficiencies and contain costs.

Everything from walkways, roadways, runways and ports to automated vehicles and drones, to the wireless and broadband networks and sensors needed for connectivity must be considered. An added challenge is ensuring that regulations promote public safety and provide privacy protections while leaving sufficient freedom to innovate and protect local control of public rights of way.

Cities and counties must put infrastructure in place to support smart city development. They must be prepared to take advantage of emerging opportunities for partnerships, innovative contracting, design-build solutions for the integration of new technologies and other alternative construction methods, when appropriate. It will also prove critical to be prepared for opportunities to safely and effectively integrate new transportation models and technologies into the transportation system — including mobile fare payment systems, app-based next bus and train notifications and delay alerts — and to secure and enhance connectivity for both riders and transit staff. Further, drones offer opportunities to inspect and maintain critical public infrastructure.

The most effective planning requires participation by designers, planners, policy makers, law enforcement, government leaders, private-sector investors, innovators and public agencies. Gaining citizen buy-in is another key to success. By engaging citizens in discussions about their concerns, cities can design projects that will garner constituent and political support, smooth the process, optimize success on bond and sales tax ballot initiatives, and leverage both public and private investment. By partnering with other agencies and considering regional opportunities, inventors, private investors and public agencies can share risk and leverage private-sector innovation to plan for — and realize — the benefits that emerging transportation technologies offer.
 

Federal, state and local governments are working toward creating a viable legal framework with rules to regulate autonomous vehicles. In 2016, the Department of Transportation, through the National Highway Traffic Safety Administration, released the first-ever Federal Automated Vehicles Policy. The Policy was updated with version 2.0 last year, and version 3.0 is already in the works. Although not mandatory, the Policy provides guidelines to the private sector concerning the development of highly automated vehicles and encourages states and local governments to work together to standardize and maintain road infrastructure. Further, the Policy recommends that states and local governments evaluate their current laws and regulations to address possible impediments to automated vehicle testing and deployment. For example, it suggests changing the definition of “driver” to accommodate a computer handling all driving tasks and evaluating insurance requirements and liability issues.
 
As of this writing, at least 20 states have passed legislation concerning insurance, privacy and user fee requirements tied to vehicle miles traveled for autonomous vehicles. Four states have issued executive orders related to automated vehicles, and the California Department of Motor Vehicles is expected to release its final regulations on automated vehicles in 2018.
 
To avoid inconsistent laws across the country, the automotive industry has called for Congress to adopt national standards for autonomous vehicle regulation. At this time, there are two bills moving through Congress. Both have vague preemption language limiting state and local governments’ ability to regulate highly automated vehicles. Although a consistent set of nationwide rules is imperative, state and local governments need to retain local control over use of the rights of way within their jurisdictions consistent with local police powers and to ensure public safety. Prioritizing safety while promoting innovation, balancing the importance of federal and state roles, and enhancing cybersecurity and privacy protections are just some areas in which local governments need to voice concerns and influence over state and federal policy and regulation.
 
A further challenge is ensuring necessary infrastructure is in place for the safe operation of autonomous and connected vehicles. This includes everything from roads to wireless and broadband networks. By combining efforts with the private sector and each other, local governments can leverage expertise, improve efficiencies, contain costs, determine “smart” infrastructure needs and optimize the integration of new technologies. Through collaborative testing, risks can be assessed and remedied early, and cities and public agencies can gain firsthand, real-world experience in how these vehicles will impact their communities. Moreover, such testing and evaluation will help determine how laws need to be modified and identify unintended risks that must be mitigated.
 
A lot of thought will need to go into how infrastructure should be designed, especially since autonomous vehicles may be operating alongside traditional people-driven vehicles. In addition, planning officials must consider how autonomous vehicles will change land use and public transportation needs. For example, pick-up and drop-off zones for first-mile/last-mile transport to and from public transport are already in higher demand — and the need will only increase. Also, fewer parking lots and parking spaces will be needed. Local governments and transit authorities will need to find ways to safely and effectively integrate ridesharing and other transport options to retain current — and attract new — public transportation patrons. A safety net structure must be established to address network outages and equipment failures. Further, public agencies will need to rethink staffing to make certain workers have the necessary skills to monitor networks and connected infrastructure.
 
Participating in pilot programs will provide cities and transit authorities with the opportunity to gain first-hand experience with how these vehicles will operate and the challenges they present. And that information will go a long way in helping them acquire insight into how infrastructure will need to be designed and insurance requirements established.
 

We are in a transformative age with smart technologies changing the way people work, commute and choose where to live. In just the past few years, we have seen innovation come to dominate the news:

  • Waymo announced that it will test Level 4 automated vehicles without a driver in Arizona,
  • Amazon announced its Prime Air rapid-transport unmanned aerial vehicle delivery service that promises delivery via drone of packages weighing up to five pounds within 30 minutes and
  • Hyperloop One, under development, promises to deliver passengers from Los Angeles to San Francisco in just 30 minutes using a propulsion system.

 
In addition to the rise of autonomous vehicles, opportunities to merge innovation with traditional transportation should not be forgotten. For example, the CV Link project in the Coachella Valley, which integrates pedestrian, bicycle and low-speed electric vehicle traffic in a dual-use pathway, reflects the growing popularity of multi-modal transportation corridors. It also provides an opportunity to consider the incorporation of automated shuttles and dockless and electric bike sharing into an innovative commuting corridor.
 
At a time when technologies are constantly evolving, cities and public agencies face the challenges of determining which innovations will prove to be the best investments. From fare payment systems and ticketless travel using mobile apps to smart signals and integrating traditional transit services with Uber, Lyft and other on-demand transportation networks, we are seeing innovations used in new and creative ways to optimize the travel experience and enhance mobility and economic opportunities.
 
With growing urbanization — and the congestion that comes with it — as well as an aging population and younger people seeking cost-effective, convenient and reliable travel, the desire and need for better public transit systems and options are increasing. Ridesharing and autonomous vehicles, perceived by some as threats to public transit, can actually be cost-efficient tools for transit systems by broadening access to public transportation. Bus and train schedules and routes will need to be reconsidered, and technologies must be employed to optimize connectivity, ease mobility and provide ready accessibility to home, work and social venues.
 
Although opportunities abound, there are significant challenges. However, through proactive regulatory engagement, regional planning and coordination and partnerships with the private sector, cities, counties and transit agencies can effectively navigate the challenges.
 

Local governments can face tremendous uncertainty in planning projects to integrate new technologies, especially regarding long-term funding for infrastructure development. While we await the President’s $1 trillion infrastructure spending plan in early 2018, public agencies need to prioritize projects, focusing on those that utilize both public and private funding, including a variety of tax credits, bonds, taxes and tolls. These financing plans should also ensure sufficient funding to repair and maintain existing infrastructure.
 
Although there is still no definitive infrastructure funding plan, Secretary of Transportation Elaine Chao has emphasized the need to “leverage” public funds to unlock and “incentivize” private investment in public infrastructure projects. Even if a Trump infrastructure funding plan does not come to fruition, the existing surface transportation spending bill known as the “FAST Act” is set to expire in 2020. Accordingly, discussions around funding repair, modernization and maintenance of our public infrastructure system will need to move forward.
 
Public agencies already have existing funding options that include a number of federal funding programs. However, the federal government has requirements and priorities that must be heeded, and obtaining federal funding is a highly competitive and often complicated endeavor. For example, the Department of Transportation’s Infrastructure for Rebuilding America Grants program makes available approximately $1.5 billion to rebuild, repair and revitalize transportation infrastructure using federal funds to leverage nonfederal investment. But, in addition to promoting at least 25 percent of funding for rural projects, the INFRA program favors projects that:
 
1.) promote economic vitality, job access and enhanced mobility,
2.) pair INFRA grant funding with “innovative financing” or
3.) utilize technology to improve transportation safety, expedite project delivery or enhance the environment for automated vehicles.
 
Carefully tracking federal funding opportunities provides insight into the current administration’s priorities, and helps public agencies prioritize projects and determine when valuable resources should be expended in applying for available grants.
 
For now, and hopefully for the future, municipal bonds remain a viable and cost-effective resource for public agencies to finance public infrastructure. Bonds enable agencies to control borrowing costs, maintain control over a project in their community, and provide important sources of local matching funds to compete for federal funding.
 
New Market Tax Credits provide another financing tool by giving private investors a federal tax credit in exchange for investment in development in underserved communities. NMTC transaction proceeds may be used for project costs, including infrastructure to the extent infrastructure is part of a larger qualified project and is directly tied to community benefits attributable to the project. As the tax reform debate continues, it is critical for public agencies to voice support for such tax incentives. They should also provide federal lawmakers with tangible examples of completed projects that utilized such incentives so that public agencies can continue to leverage private investment in public infrastructure projects through the NMTC program.
 
While plans take shape, local governments and public agencies must stay informed and communicate concerns, needs and priorities to lawmakers and decision makers. They must build investor, community and political support, and engage in discussions with developers. By doing so, local governments can best position themselves to act quickly and effectively once they have a clearer picture of funding opportunities. Moreover, there may be opportunities to proactively help shape the next infrastructure spending package.
 
The following are important steps for cities and public agencies to take while the infrastructure planning debate continues:

  • Advocate for continued federal funding and to retain the ability to fund infrastructure, including through imposing user fees, exercising taxing authority, utilizing public-private partnerships and capturing the investment benefits of tax-exempt municipal bonds.
  • Identify and prioritize infrastructure projects with federal elected officials and administration staff, and develop a funding strategy for priority projects that considers all potential revenue sources to demonstrate the viability of a project and an ability to meet local funding requirements for federal assistance.
  • Promote “common sense” policy changes to speed project delivery, promote innovation and creativity, and encourage development and implementation of emerging transportation technologies.
  • Work with a trusted advocate, maintain relationships with federal officials and lawmakers, and communicate project successes and challenges to decision makers and influencers.
Sonia Rubio Carvalho

Sonia Rubio Carvalho

Partner

(949) 263-2603

Areas of Focus: Economic Development, Real Estate & Affordable Housing | Elections | Government Policy & Public Integrity | Municipal | Public Contracts & Construction
Paula C. P. de Sousa Mills

Paula C. P. de Sousa Mills

Partner

(619) 525-1328

Areas of Focus: Environmental Law & Natural Resources | General & Special Counsel | Local Agency Formation Commission (LAFCO) | Municipal Law | Public Contracts & Construction | Special Districts
Steven C. DeBaun

Steven C. DeBaun

Partner

(951) 826-8201

Areas of Focus: Environmental Law & Natural Resources | Municipal Law | Special Districts | Transportation
Scott Ditfurth

Scott Ditfurth

Partner

(951) 826-8209

Areas of Focus: Business Litigation | Eminent Domain | Municipal Law | Public Agency Litigation | Special Districts | Transportation
John Gasparini

John Gasparini

Associate

(202) 370-5314

Areas of Focus: Government Relations | Municipal Law | Public Safety | Special Districts | Telecommunications | Transportation
Gregory Rodriguez

Gregory Rodriguez

Of Counsel

(202) 370-5308

Areas of Focus: Government Relations | Municipal Law | Special Districts | Transportation
A. Haviva Shane

A. Haviva Shane

Of Counsel

(951) 826-8289

Areas of Focus: Municipal Law | Public Contracts & Construction | Special Districts | Transportation | Water
Ann Siprelle

Ann Siprelle

Partner

(916) 551-2834

Areas of Focus: California Public Records Act | Environmental Law & Natural Resources | General & Special Counsel | Municipal Law | Public Contracts & Construction | Special Districts
Malathy Subramanian

Malathy Subramanian

Partner

(925) 977-3303

Areas of Focus: California Public Records Act | Economic Development, Real Estate & Affordable Housing | Government Policy & Public Integrity | Local Agency Formation Commission (LAFCO) | Transportation

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