Industry Focus: Transportation

Nevada’s transportation industry has seen a fair share of ups and downs in the the past several years. Working around funding issues while trying to educate the public on their needs, industry leaders have a myriad of challenges to overcome. Recently, transportation executives met at the offices of the Regional Transportation Commission – Washoe in Reno to discuss those challenges.

Connie Brennan, publisher of Nevada Business Magazine, served as moderator for the event. These monthly meetings are designed to bring leaders together to discuss issues relevant to their industries. Following is a condensed version of the roundtable discussion.

What is your biggest challenge?

Marily Mora: Having lost a third of our passengers in recent years, rebuilding our air services is our number one priority for Reno/Tahoe Airport Authority. We believe you have to have the community support new air service. We’re very excited about the growth of jobs in Northern Nevada because that will certainly drive air service.

Lee Gibson: Our biggest challenge is funding, financing, and project delivery. We have to figure out a way to deliver projects, not so much cheaper, but cost efficient. We’ve got to figure out a way to deliver projects quickly.

John Hester: [Our challenge is creating] policy to keep up with technology. We’re seeing some major changes in technology starting to emerge and new policies aren’t always with them.

Paul Schneider: Its determining the mix of transportation solutions that we’re going to apply. Given the different goals that we’ve got like safety, public health and economic development, within the constraint, we have to make very tough choices constantly.

Tina Quigley: There’s a lack of conversation related to the nexus between transportation infrastructure and economic development. We feel like we need roads. Our roads are battered and we need more roads. But we’re not that great at communicating to the community and the world. Why?

Joe Miller: Our biggest thing right now, since we just got the I-11 Phase 1 with NDOT, an $83 million job, is hiring local workforce. That’s our number one thing – we want to hire locals. But the workforce right now is hard to get the most qualified people, to train them, to have the best workforce we can possibly get, and it has to be local. That’s what we’re striving for.

Andy MacKay: We’re the agency that is going to be responsible for regulating transportation network companies like Uber. In my world, everything is living and breathing and starts and stops with Uber right now as you can imagine. Uber, Lyft, Sidecar, you name it. I think more globally how that affects all of us is how we fund. We’re getting less bang for our buck. It’s just the nature of the beast. So funding and then tier point technology. Moving an archaic industry into something that’s more the 21st century.

Bill Hoffman: The biggest challenge I see at NDOT right now is to try to keep transportation at the same growth rate or ahead of this economic development tsunami that we hear about coming to Nevada.

How are you funded?

Mora: Funding on a national basis through the federal aviation administration in terms of the money available for the airport improvement program [is a challenge]. It’s a static number that we’re looking at and we want the ability for airports to raise the passenger facility charge (PFC), which is a fee on your ticket so the users of airport systems pay for facility improvements. We need to see that PFC increase because it’s worth a whole lot less than the $4.50 that was put out a number of years ago. That gives us the opportunity to really do our local improvement and that’s how we’ve done consolidation of our check points. From a federal perspective, that is a challenge in terms of funding.

Gibson: There are also challenges on the public transportation side. We’re operating on 2003 and 2004 sales tax revenues on 2015 costs to run a public transportation system. We just had a blue ribbon committee look at the question of public transportation. They don’t want to see anymore services cut. They want to see service for seniors and they’re challenging my board to consider a ballot question in 2016 or 2018 for an eighth of a cent sales tax [increase]. We’ve got to figure out a way, at least in Northern Nevada, to look at these public transportation investments, not from the standpoint of social service, but from a standpoint of a major transportation investment. Public transportation funding has got to be on the table at some point.

Paul Enos: Let’s talk about Las Vegas for a second. If Las Vegas doesn’t have I-15, which we didn’t have for a couple of weeks, the floods washed the road away, that cuts a lifeline to Las Vegas off. If we don’t have federal involvement in some of these areas, we are taking these little links out of the supply chain and we are making it more difficult to move our freight and move our people. We are putting these barriers up.

Curtis Myles: Private industry can bring a lot to the table. A lot of private partnership-type programs were theorized to incentivize private entities to get involved. But, really what it does is incentivize private entities to go in, take what they can get, and get out.

Carl Hasty: We’re going to need [financing] from all sources because there isn’t going to be one giant federal delivery. I don’t think the feds are going away, nor should they, especially when it comes to interstate, but if we don’t also address this at the state level and the local level like many communities have, like Denver or Utah, we’re not going to go very far. We’re going to need it all. We all need to be working together.

Enos: We need to do the hard thing, but the smartest thing, and that’s raise the fuel tax.

Hasty: We are not doing the job about educating the constituent out there. The only thing stopping our politicians from pulling the trigger is we don’t have enough of the public that’s telling them to do it.

Patrick Pittenger: One moment on funding for us non-Washoe, non-Clark folks. I know there’s not that many of us, but we don’t have fuel tax indexing. It hasn’t gone up on any level since 1997. We have worked with the Nevada Department of Transportation (NDOT) through agreements we all agreed to, but we have 20 more miles of the biggest roads in town that we now have to pay for. We have less gallons of gas sold than we did in 2007, our roads have not been maintained properly for years, and the condition of them is going downhill. So it’s really basic math for us. We have more roads, we have older roads, and we have less money. Period. The gas tax vote that is next November is our one lifeline out there.

Myles: The fuel tax is an extremely good thing because between here and where we need to be, there’s nothing if there’s no fuel tax. What we have to try to educate the public about is that we want them to go to the ballot and do this because it gets us to this next thing. If you don’t do this, you don’t get to the next thing.

How do you decide where to spend your money?

Hoffman: Trying to decide which area of highway infrastructure to spend your money on is very challenging. We understand business and economic development is huge, especially as we’re climbing out of the recession right now. But, how can NDOT or anybody else start economic development or complete streets and things like that? How do we go through the planning process to figure out what we need to spend our money on when you’re considering safety?

Pittenger: We’re talking about, on a very specific point, making decisions. We have such limited resources, the pie is so small, that I’ve got a developing intersection safety issue that I want to address, but if I want to do that, I have to cancel other projects. Period.

Schneider: The whole planning process is so incredibly complicated, it’s not even funny. Right now you have existing infrastructure that takes a lot of money to maintain. You have to decide how much and what level of maintenance you’re going to invest in the current roadways. You’d like to keep it at this level but it costs a lot. You have to make decisions on optimizing the performance of the transportation system, putting in meters, putting in bus lines, all those operations. Then you’ve got these rules where you want to make it as safe as possible, but we also have to improve the economic situation. If we poured every bit of money we could into safety, we could bring down fatalities and injuries tremendously. But, you can’t just say that’s all we’re going to do. We can’t say we’re going to have it so safe, but the roads are operating at five miles per hour.

Gibson: You’re coming back to what I’m really concerned about. If you have fuel index taxes, you’ve been blessed. You’re going to get your index fuel tax but what happens with index fuel taxes is you’re going to build a lot of roads. That brings the requirement to operate and maintain those roads. We have very limited statutory and constitutional limitations on gas taxes, and to some extent, sales taxes. How are we going to fund our operations and maintenance programs, our highways and public transportation systems, and make all that work?

How far along is Interstate 11?

Quigley: It’s under construction right now. It’s a really interesting project in that it’s local money. The RTC Southern Nevada is building twelve and a half miles of it. And then NDOT and Fisher are building two and a half miles of it. That in itself makes it very unique. The fact that its fully funded and it’s under construction gives a sense of commitment that Las Vegas and NDOT have to the public. But what’s interesting too is that Arizona has a very firm commitment to it as well. We want to see that freight movement go from Mexico, Tucson, Phoenix and Las Vegas and they are doing all that they can. They have a strong proponent group for that, recognizing the economic activity and diversification. I have been surprised by the amount of private sector businesses and the chambers that got involved. That’s one of their number one priorities – advancing that corridor.

Miller: This project will have more of an economic impact than just creating jobs to build it. We’re building something that will impact generations to come; I-11 will allow for increased commerce between two major metropolitan areas that will continue to boost our economy long after the concrete is poured. This project is much bigger than Fisher or NDOT or the RTC, we’re building Southern Nevada’s future.

Hoffman: NDOT goes on our county tours and our local conservation tours every summer. For the last two years, it doesn’t matter which county you’re in, their first question is, “What’s I-11? What’s going on? Where is it going?”

Quigley: It might be because there seems to be an understanding between the nexus of transportation and economic development for that project.

How does engagement differ across the state?

Gibson: We have a lot of public engagement [in Washoe]. Having lived in Southern Nevada, it’s pretty different.

Quigley: There’s a different culture between the two. When you move to Northern Nevada, you know that this is your home. In Southern Nevada, we’ve been a culture of transiency. Most of us, and I’m guilty of this as well, moved there in the early 90s thinking we were only going to stay there for a couple years. That’s a different cultural psyche – the amount of time and energy that you’re willing to invest in your community is very different when you know you’re going to live there forever versus thinking you’re just building your resume. But the thing is, 25 years later, I’m still here.

Myles: It’s a different mindset than Northern Nevada. Entirely different; the attitude is just different. We think about Las Vegas differently as a community. We could never do that because people are just not that engaged.

How do you educate the public on the needs of this industry?

Enos: The fuel tax is unpopular and it’s insane that it is because it’s the most efficient mechanism we have to take care of our highways. For every dollar we collect in fuel tax, it cost three cents. That means 97 cents goes back to the roads. That’s how we need to start educating people. We need to say this is the best way to go.

Pittenger: To address the public input, that tax that you talk about – the 1997, five cent gas tax – that is still news for us. To this day, as we start talking about the fuel indexing, everyone remembers 1997 and says, “You just did it. It was only 18 years ago. Don’t you have plenty of money?”

MacKay: You can sell it to the populace. RTC Washoe did it at the peak of the recession. We had unemployment at 14 percent, or whatever it was in Washoe County and [they said] pay some now or pay a hell of a lot later. That’s how you educate the populace.

Hasty: We have an opportunity here with what Washoe’s done and what Southern Nevada has done, with what this legislature has done. We’re not being smart enough to educate the public out there with the right kind of messaging and we’re not investing the kind of money and energy that it’s going to require in order to really move the whole state. I think that’s our opportunity and that’s where we need to go. That’s what we have an opportunity to do, if a table like this and others would really start to work together and harmonize. We’re not starting from zero, the economy is starting to come back, so now what are we going to do when we have all this transportation in play to keep it moving.

Enos: The challenge is also trying to compete with all the other priorities of government with finite resources. When you go out and do a poll, transportation is most important to about 3 percent of the people. It’s always a very, very low number. It’s just something people expect and take for granted until it’s not there. We need to look at air, we need to look at rail, we need to look at how it all fits together as a global system.

Myles: That’s a difficult thing to get a general populace to understand. There’s a very complex system. And you start moving things on one side and it pushes the other side, so you have to be moving things collectively to move ahead or move up. People don’t understand that. It’s very complex.