Innovation of the Month: Value Capture
When government invests in transportation infrastructure, the improvements gained from the resulting projects enable further development and increase property value for the adjacent property owners.
Value capture, May's Every Day Counts round five (EDC-5) innovation of the month, seeks to capture a portion of the value created by transportation infrastructure investment, which can then be reinvested into roadway operations, maintenance, or financing current or future transportation construction projects. It is one powerful tool to address the growing gap between available funding and roadway construction and maintenance needs.
Approximately three million miles of public roads are not eligible for Federal-aid Highway Program (FAHP) funding, and rely primarily on State and local funding to finance new projects and maintain existing facilities. Value capture provides an opportunity for local governments to raise money to pay for these efforts or provide local matching funds for FAHP projects.
Value capture can be used in a wide range of settings including urban, suburban, and rural areas. Across the nation, value capture has helped fund the delivery of many successful projects. In Yankton County, SD, a project that upgraded a township road serving an industrial park stimulated millions in economic growth. A $6 million loan from the South Dakota Department of Transportation in State highway funds has resulted in over $250 million in private investment in the industrial park, generating new jobs with millions of dollars in annual payroll for the area and millions of additional dollars in property taxes. The project is paying the State back with the increased taxes—through Tax Increment Financing (TIF).
As shown in Yankton, TIF captures a portion of future tax revenue increases in a designated geographic area to pay for transportation investments. This technique follows a common value capture philosophy – those that benefit most from transportation investments should help fund those investments.
Over the next few weeks, we will look at examples of different value capture techniques and how they have benefited communities all over the country.
If you would like to learn more about this innovative financing approach, contact Stefan Natzke of the Federal Highway Administration Office of Planning, Environment, and Realty or Thay Bishop of the FHWA Center for Innovative Finance Support.
Massachusetts Rolls Out E-Construction Program with STIC Incentive Funds
The Massachusetts Department of Transportation (MassDOT) used State Transportation Innovation Council Incentive funds to develop and implement its construction project documentation collaboration system. This e-Construction effort includes enhancements such as the ability to run project-specific and enterprise-wide reports, which will quickly provide state officials access to useful information. The agency is also expanding use of its ProjectInfo project tracking system to approve contract amendments, including time extensions and budget adjustments. MassDOT deployed 200 tablets in support of e-Construction efforts, providing construction staff access to internal and external applications and resident engineers the ability to file electronic daily reports.
To learn more about how your agency can incorporate e-Construction and partnering into your programs, contact Kathryn Weisner with the FHWA Resource Center or Chris Schneider with FHWA's Office of Infrastructure. For more information on the STIC Network and the STIC Incentive Program, please contact Sara Lowry, Program Coordinator for the STIC Network.
Delaware Uses Innovative Tools to Evaluate Quality on Road Construction Project
The Delaware Department of Transportation (DelDOT) evaluated the effectiveness of advanced quality assurance and quality control (QA/QC) tools on a U.S. 301 construction project. Continuous compaction control and intelligent compaction (CCC/IC) technology provided nearly 100 percent coverage on the soil compaction process, compared to traditional QA/QC techniques that rely on spot testing of less than 0.1 percent of the project site.
The CCC/IC technology also provided real-time feedback DelDOT could use to make informed decisions on soil compaction. The project confirmed the ability of a light weight deflectometer to accurately measure soil strength properties in the field. This provides a better indication of roadway performance than traditional measurements. The project also found users could produce results using a nondestructive thickness scanner to measure compacted soil that were nearly identical to those taken with a conventional tool. Nondestructive tools allow for more tests without the damage of traditional excavation or coring processes.
After using STIC Incentive funds to evaluate the tools, DelDOT is developing standards for their use in soil and asphalt compaction QA/QC. For more information on this project, contact James Pappas of DelDOT.
Every Day Counts, a State-based program of the Federal Highway Administration’s Center for Accelerating Innovation, works with State, local, and private sector partners to encourage the adoption of proven technologies and innovations to shorten and enhance project delivery.