If you're working for one of the nation's burgeoning cities or counties, you're wrestling with how to build and fund infrastructure that accommodates future traffic growth. Traditionally, developers have built and paid for improvements via permits issued by a city. While permitting works well for low- to moderate-growth areas, it has definite deficiencies:
Equity issues. Improvements are not tied directly to a development's net increase in traffic, but on the increase in traffic as it relates to exceeding the capacity threshold of an intersection or road.
A big-box development built along an arterial road, for example, could be responsible for fewer improvements than a small residential development built along a congested highway. Another complication is that existing developments may have never contributed to transportation improvements on roadways they have used for several years.
Perpetual construction. Intersections and roadways might be reconstructed several times within a few years as multiple developments require making improvements to the same area.
Segmented improvements. When a traffic impact assessment (TIA) has a limited scope, it's difficult to see how multiple developments impact a broad area. Segmented improvements appear to be designed and constructed individually rather than as a whole.
There are four primary TIA models that highlight a range of alternatives for identifying necessary improvements, determining funding sources, and implementing a construction schedule that will accommodate growth. Assess the speed of your community's development—low-, moderate-, or high-growth—before selecting one.
- Comprehensive municipal traffic model: An assessment of the entire area based on expected land uses, zoned or master-planned. The roadway network can be reconstructed with bond money. This is effective where significant development is expected to occur within a given area, though limited by development assumptions rather than actual plans.
- Base municipal traffic model: After an initial study, this model is updated as developments occur. Infrastructure improvements are constructed in increments to accommodate future traffic. Effective in moderate-to-high-growth areas.
- Joint development TIA: The city coordinates with multiple developers to submit one collective assessment and split the improvement costs. Effective in low-to-moderate-growth areas. Improvements are constructed concurrently, but varying development schedules present a challenge.
- Isolated TIA: Each development conducts its own assessment and makes improvements. Responsibilities may be more easily identified with fewer stakeholders. This model is effective in low-growth areas.
Several common financial strategies address the shortcomings of the permit process:
- Traffic impact fees: More than 20 states currently allow traffic impact fees, which are assigned based on a development's trip generation. The municipality assesses trip calculation (daily traffic or peak hour traffic), how the value is applied (total trips leaving the development, total trips at a given intersection, etc.), and what reductions or credits should be applied (reductions for linked trips, credits for transit service, etc.).
- Special assessment districts: If provided through the state's enabling legislation, this strategy can be used to finance public improvement projects. Bonds are issued to pay for the improvements, and the property owners within the district repay the bond with monthly or annual payments.
- Tax increment financing: The municipality collects the tax increment that results when property values increase in a defined district. This increased revenue finances transportation improvements within the district.
- Municipal funding: While few municipalities have the ability to fully finance transportation improvements, some take a proactive approach to constructing a base infrastructure that minimizes developer costs.
Each combination of TIA strategies and financing alternatives presents opportunities, advantages, and disadvantages. A combination that works well for one community may prove costly and ineffective for another. Examine all your options to find the best fit.
— Hawley is a professional traffic operations engineer and a project manager for R.A. Smith & Associates, Brookfield, Wis.