APTA Transit Board Members Seminar - Norfolk, VA


07-16-07

James S. Simpson
Talking Points for Remarks at
APTA Transit Board Members Seminar
Opening General Session
Norfolk, Virginia
Monday, July 16

I am proud to be here on behalf of President George W. Bush and U.S. Secretary of Transportation, Mary Peters. Today, I am going to discuss the roles and responsibilities of public transit board members. 

I am approaching one year as FTA Administrator and I served for ten years as NYC MTA board member.  Today, I want to draw on these experiences - as well as my experiences as a private-sector CEO and transit rider – to cover some themes that may frame your public service on a transit agency board. During my tenure on the New York City MTA Board, I served on the committees dealing with Planning & Real Estate and Safety & Security. Consistent with the proper role of a governing board, our assignment was general oversight and high level strategic vision, guidance and approval.

The role of the Safety & Security Committee was to ensure implementation of MTA safety goals and programs, monitor safety performance indicators for the system, and help identify safety/security problems and initiated solutions. The role of the Planning/Real Estate Committee included taking action on property acquisition and disposal, advertising and leasing policy (lots of commercial leases) in addition to covering broad real estate policy.

To put it simply, I’ve been in your shoes.

ENTREPRENEURIAL GOVERNMENT

At previous APTA meetings, I have expressed my belief that my experience as a business owner could add value to the FTA by focusing on the concept of “Entrepreneurial Government.” An essential component of Entrepreneurial Government is measuring success.  Every public and private organization needs a bottom line.  For transit, the bottom line is to keep the ridership momentum growing, and to provide a continually more efficient, user-friendly, reliable, productive and cost-effective operating system.  As a transit agency board member, you can help set the broad strategic framework, and track agency performance metrics with the agency’s management team. 

Like a private business, transit agencies and their boards seek more customers… In other words, a bigger market share. 
To succeed in this goal, we need to make sure that our transit systems are managed like successful for-profit companies with sound business practices.  Public transit must deliver the most value for every dollar.  We must cut inefficiency wherever possible! Public transit needs effective leadership at all levels.

Entrepreneurial government requires putting the customer at the top of the hierarchy; and turning the organization upside-down.  At the top you have the American people;  the transit rider;  (our customer),   and the automobile user or non-transit user  -  (our potential customer).

Next in the hierarchy; are all of our elected officials who represent the needs and interests of our customers (The American People). They are followed by the transit authorities, suppliers to the industry;  and, at the bottom is the FTA…  We at the FTA… should be the foundation supporting everyone above.

Our mantra in the transit industry… at every organization, from operating authority to supplier, should be as follows: You have one of two jobs in public transit.  Either you serve the riding public directly (like a bus driver who is on the front line) … or you serve someone who serves the riding public directly.  That “philosophy of service” … is the holy grail of successful service providers… public or private. Transit agencies around the world that behave entrepreneurially are best able to thrive. 

I like to refer to Robert Cervero, a professor at UC Berkeley, who has written in his book - The Transit Metropolis, that the strongest transit regions in the world have one thing in common…  Adaptability; what he defines as a “calculated process of making change by investing, reinvesting, organizing, reorganizing, inventing, and reinventing…  Adaptability is about self-survival in a world of limited resources, tightly stretched budgets, and ever changing cultural norms, lifestyle technologies and personal values.”  This is true for private firms and public agencies.  Change and adaptation are essential to an organization’s vitality and development.

In today’s fast-paced global marketplace, there is certainly no patience for business as usual.  You have to think of business NOT as usual.  Transit agencies that adapt to changing times and create harmony between their transit service and the urban landscape will thrive decades into the future. Reliable and accessible transportation is a prerequisite for a healthy economy and it also means meeting the basic, day-to-day mobility needs of everyone… including… older Americans… individuals with low-incomes and people with disabilities.   It is often their first step toward independence and opportunity.

ACCOUNTABILITY

Entrepreneurial government also means being accountable. That accountability must apply to decisions made at every level of the transit industry. In our representative system of governance, transit board members are the citizens who have been either directly elected, or more commonly, appointed to a position of public trust and oversight of broad transit decisions in the community. You are accountable to the bottom line… growing ridership while delivering the most cost-effective and user-friendly transit systems possible.  Another part of accountability is recognizing success; in our case, increasing the number of riders… while ensuring we pay careful attention to our cost structure; and while enhancing the safety and security of our customers and employees.

BOARD MEMBER ROLES AND RESPONSIBILITIES

I recall from serving on the NYC MTA board that there are many available tools to help board members become more effective.  APTA has demonstrated leadership in this area, and this conference is a key venue to learn and gain additional transit knowledge.  There are organizations like the National Council for Nonprofit Boards – recently renamed BoardSource - that can also guide us.

The Pennsylvania Transportation Resource and Information Network’s (PennTrain) outstanding publication, “Roles and Responsibilities of Transit Board Members” does a great job encapsulating the roles of transit board members.  I believe it is worth reading to you word for word.

In short, there are…Three Primary Responsibilities of boards:

Legal Concerns: If your transportation system happens to be an authority or a private nonprofit, the board is the legal body. All contracts, labor agreements, personnel policies, etc. must be approved by the board. In most organizations, all legal business must be done in full view of the public with legally convened meetings.

Stewardship: Since most of public transportation is provided using public funding, the board has a responsibility to carefully review the use of these resources.

• The board should understand the budget and review financial statements that insure all spending is in conformance with all federal, state and local rules and regulations.
• Members also have a responsibility to carefully balance community needs with available resources. Stewardship involves not only fiduciary responsibility, but such things as performance measures that insure a reasonable and responsible return on investment.

 Advocacy: To be an effective board member, it is vitally important that you support  public transportation in your community.

• The availability of safe and dependable public transportation is essential to the quality of life for many citizens.
• You must be a champion of the people who depend upon your organization.
• You should speak positively when discussing your organization with local government, the business community, social agencies, etc.
• You need to be available and committed to attendance and participating in board and committee meetings or when called upon.
• The board must focus on the big picture and policy.
• The board must support their management and allow employees to carry out the day-to-day operations.
• This careful balance of responsibilities is essential to your organization’s success.

The National Center for Nonprofit Boards – now BoardSource - a nonprofit organization in Washington, D. C., has identified the ten areas of responsibilities for boards. What follows is a modified version of this list:

 1. Determine the organization’s mission and purposes;
 2. Select the Executive Director;
 3. Support the Executive Director and review his or her performance;
 4. Ensure effective organizational planning;
 5. Ensure adequate resources;
 6. Oversee/monitor effective use of resources;
 7. Determine and monitor the organization’s program and services;
 8. Enhance the organization’s program and services through advocacy;
 9. Serve as a court of appeal where appropriate, and
 10. Assess its leadership role, effectiveness and performance.

In general, the Board focuses on policy and the big picture. The Executive Director and staff deal with actual operations.

Advanced Issues

1. Is the current board effective? Does it focus on priorities?
2. Are there any issues that the board spends time with that fall outside the realm of policy and within the realm of day-to-day operation?
3. Does the board monitor/assess its own performance and effectiveness? How does it do this?
4. What are the critical issues facing the board in terms of process (for example, board meetings are not well attended, the group is not cohesive, there is disagreement among the members)?
5. How effective are board committees?    

BOARDS AND PLANNING: LOOKING AHEAD

Planning for an efficient, safe, reliable and well-managed organization means that you must “think globally”— that is, you must focus continually on the mission and goals of your organization and what you want to accomplish, as you plan for the future.

1) What is the mission of our organization? Where are we today?

APTA’s Mission Statement: “To strengthen and improve public transportation, APTA serves and leads its diverse membership through advocacy, innovation, and information sharing.”

2) What is the vision of our organization? Where do we want to go tomorrow?
 
APTA’s Vision Statement: “Be the leading force in advancing public transportation.”

3) What are the organization’s values?
4) What kinds of service improvements do we want to make?
5) How are we viewed in the community?
6) What is our long-term fiscal situation?
7) What are our constraints?
8) What do we need to do to meet our goals and vision or the future?
  
 (Pennsylvania Transportation Resource and Information Network, Roles and Responsibilities of Transit Board Members, March 2005, www.penntrain.net.)

MOMENTS OF TRUTH

Considering your role as board members, I know you will make an effort to use your transit system, whether every day or on a regular basis.  There’s nothing like managing by wandering around to experience life from the transit customers’ point-of-view.  It also creates opportunities to have experiences with customer service.

“Way-finding”

I recently traveled to a city and decided to take the light rail line from the airport to my hotel.  It was a great system and everything was fine until I stepped off the train downtown and there was absolutely no information at the light rail stop to help me navigate the surrounding area; no maps or directional arrows with major destinations. Only a transit board member experiencing this firsthand could fully empathize with the need for this sort of passenger information.  Improved maps and related “way-finding” information might even become a focus area for FTA as a result of this experience.  I am certain that other passengers have had this same experience. We also know from general customer service research, that for every one person who writes or calls to complain about service, there are an additional 27 people who are equally unsatisfied. In addition, that  person who is unsatisfied is likely to tell ten other people about it.  I just told 200 people.

Fare evasion

On another recent trip, I traveled on both the bus and rail system of a major transit operator. While riding the system, I observed some instances of fare evasion. I’m from Brooklyn, so I know a few things about fare evasion.  Fare evasion is a form of customer service we can do without, and in our efforts to pay attention to the bottom line and treating our customers equitably, we need to ensure that everyone pays their way when they board the bus or train. Clearly, the public transportation industry has taken steps over time to reduce the revenue losses from fare evasion, but this was a reminder to me that more can be done. 

Passenger Counting

Riding the bus or train, you’ll also get a sense of passenger counts.  We can only manage what we can measure, and we need to know that our measurements are valid.  Over time, we’ve been using automated passenger counting technology to count riders. In some systems, ride checkers are still an integral part of patronage counts and National Transit Database reporting.  As board members, you can take the bus and ride the train, and it will generate endless ideas about how to create a cycle of customer satisfaction and increased revenue from ridership.

MEGA-TRENDS

There are some mega-trends that I encourage you to follow closely as a transit board member.

Energy Independence

It is no secret that our nation has serious concerns about the amount of energy that we consume and the amount of foreign oil that we import to meet our needs. Transit serves our national interests in this regard. Transit modes such as subways and light rail - including the new Hampton Roads Transit light rail system - rely on electricity for their source of energy. The vast majority of electrical energy in this country is produced from domestic energy sources. Transit systems have the ability to move people with greater efficiency, and transit can play a leading role in reducing our dependence on foreign oil.  By incorporating the latest designs in vehicles that make use of alternative fuels, such as biodiesel, or hybrid technologies that capture the energy used in breaking and using that energy to accelerate the vehicle, transit’s share of energy consumption can be further reduced. 

Environmental Benefits

While the total transportation sector contributes over 30 percent of total U.S. greenhouse gas emissions, transit stands out as a green alternative.  Transit use is good for the environment, and transit and transit supportive land-use is becoming increasingly important as a way of reducing environmental damage.  By its nature of fixed routes and professional maintenance, transit is a great testing platform for further development in this area.

The Federal Transit Administration has fostered the development of environmentally clean buses that operate on natural gas and hybrid technologies.  Now we have a Fuel Cell Bus Initiative.  We are working on developing technology to power transit buses with the use of a hydrogen fuel cell.  For rail systems, hydroelectric and wind energy can be used to power transit vehicles with zero emissions from fossil fuels. And it doesn’t stop with just the vehicles, but can include transit stations and buildings as well.  New building technologies to save energy, coupled with environmental technologies, can be incorporated into the design and operation of high performance and environmentally green buildings.  APTA’s upcoming meeting on sustainability will address some of these approaches that are good for the economy and environmental bottom line.

Congestion Reduction

Transportation system congestion is one of the single largest threats to our nation’s economic prosperity and way of life.  Whether it takes the form of highway users stuck in traffic, cargo stuck at overwhelmed seaports, or airplanes circling over crowded airports, congestion costs America an estimated $200 billion a year.  In 2003, Americans lost 3.7 billion hours and 2.3 billion gallons of fuel sitting in traffic jams.

The President has set an ambitious goal to cut America's gasoline usage by 20 percent over the next 10 years, the 20-in-10 proposal.

The proposal will set a mandatory fuel standard that requires 35 billion gallons of renewable and other alternative fuels by 2017. That's nearly five times the current target. In addition, the plan would continue our efforts to increase fuel efficiency. This administration has twice increased fuel economy standards for light trucks. Together, these reforms would save billions of gallons of fuel and reduce net greenhouse gas emissions without compromising jobs or safety.

The U. S. Department of Transportation has an initiative to reduce congestion in all forms of transportation.  A major part of this initiative is the Urban Partnership Agreements, in which the Department has received proposals from metro areas that agree to implement a comprehensive policy response to urban congestion, including enhanced transit services in combination with other strategies.

Transit will play a major roll in this initiative and the reduction of congestion by the use of successful technologies, traffic management strategies, and enhanced transit services that can be scaleable and repeatable in other cities.  According to the Texas Transportation Institute, without transit’s congestion management services, the lost productivity would be $20 billion greater.  This reason alone can justify our transit investments, and can be used to support transit investment in many communities. 

Paratransit and human service coordination

One key responsibility for many transit boards revolves around providing ADA paratransit and human services.  Later this month, it will be 17 years since the first President Bush signed the Americans with Disabilities Act into law. Since then, mobility has improved vastly for Americans with disabilities: over 90 percent of transit buses are now accessible, we’ve built 30 new rail systems since the ADA’s passage, and ALL of them are accessible. We’ve laid a great foundation for mobility, but we still have work to do.

We can’t talk about bus and paratransit service without talking about coordination of service. Coordination and mobility go hand in hand. As many of you know, President Bush signed an Executive Order in 2004, which challenged us to reduce duplication, enhance cost-effectiveness, and simplify access to transportation services for Americans who need help getting to where they need to go. Coordination is a critical element of achieving mobility for all Americans with disabilities - one that helps communities make the most out of their existing resources by pooling them, sharing information, and scheduling together.

I am proud to serve as chairman of the Coordinating Council on Access and Mobility and United We Ride, which was created to meet this challenge.  We are excited about working with our Federal partners across 64 programs – from health and human services to veterans’ affairs to education – to simplify access for our transit customers.  This is an energetic and dedicated group.

Coordination of state and local human services takes time.  I know that many of you are involved in the development of local coordination plans for our JARC, New Freedom and 5310 programs.  I thank you for your help.  As always, we are available to help at FTA, and the end result will be better, more comprehensive transportation services for many people.

Safety and Security

Our nation's transit systems are more secure than ever before.  Nevertheless, security in public places has been a growing concern, and public transportation has been repeatedly targeted by terrorists in other countries. As part of a continuous effort to provide safety and security to our nation's transit infrastructure, FTA has undertaken an aggressive nationwide security program, receiving full cooperation and support from every transit agency. 

FTA has conducted risk and vulnerability assessments and deployed technical assistance teams to help strengthen security and emergency preparedness plans, and has funded emergency response drills conducted in conjunction with local fire, police, and emergency responders. Security remains a top priority for FTA and we have implemented a program to improve public transit focusing on the three priorities of employee training, emergency preparedness, and public awareness of security issues.

CONCLUSION

In closing, I believe that one of the most important things we as industry leaders must do…is to ask ourselves…  “What business are we in?”  I asked this question at the APTA Annual meeting last fall and it is worth asking now.

We know that the passenger railroads, among the most powerful business interests a century ago, are now extinct, because they failed to adapt.  They had what I call “marketing myopia” … The railroads viewed themselves as being in the “railroad business” instead of the “passenger transport business” or the “customer satisfaction business.” Don’t think mode… think people!  If they had viewed their business as passenger transport, they might have purchased aircraft and might still be with us today. 

As transit board members, you can make sure that public transportation is thriving in the decades ahead. You can ensure your community has mobility and accessibility for its citizens.  You can help manage congestion.  You can grow communities oriented around transit. I look forward to our continued work together making public transportation even stronger for the people of this great nation.

Thank you.