Lesson

Recognize the challenges of using public-private partnerships in deployed coordinated transit systems.

Experience from the Lake Tahoe Coordinated Transit System.


4/14/2006
California,United States


Background (Show)

Lesson Learned

The institutional scope of the CTS project is large and complex, encompassing public and private stakeholders and government entities from one city and two counties in two States. The project stakeholders represent public planning organizations (Tahoe Regional Planning Agency [TRPA] and the Tahoe Transportation District [TTD], the transportation arm of TRPA), public transit providers (City of South Lake Tahoe, El Dorado County, and Douglas County), and private tourist destinations that provide transit services including five casinos (Caesars, Harrah’s, Horizon, Harvey’s, and Lakeside Inn), and one ski resort (Heavenly). Each of these organizations was active in planning the CTS project, and each of the transit providers contributed funding and/or vehicles to support the project. The CTS project plan included the creation of a management company (the CTS MCO Board) with a board of directors composed of project stakeholders responsible for deciding CTS policies. The board of directors included representatives from each of the following organizations:
  • Lakeside Inn and Casino
  • City of South Lake Tahoe
  • El Dorado County
  • Douglas County
  • Tahoe Regional Planning Agency
  • Tahoe Transportation District
  • Harvey's Hotel Casino
  • Heavenly Ski Resort
  • Caesars Lake Tahoe
TRPA, a bi-state planning agency, was responsible for funding management, grant administration, contracting, and grant compliance. The South Shore Transportation Management Association (SS/TMA), a group funded by the California Department of Transportation (Caltrans) to help coordinate transportation activities in the South Shore basin, was originally responsible for project management during CTS implementation, but this role was later assumed by TRPA.

The following set of lessons learned addresses institutional issues encountered during the project, with a particular focus on lessons learned regarding public/private partnerships.
  • Be aware of different perspectives between the public and private stakeholders. The different objectives of for-profit businesses versus public agencies created varying perspectives and priorities on the CTS board. In general, the private partners were interested in seeing a return on their investment dollars and viewed the transit service as a business, whereas the public agencies had a mission to provide a transit service that promoted mobility and environmental benefits. A discussion of the decision making process within the CTS Board emphasized the differences in perspectives. While the private partner stakeholders tended to feel that the decision making process was slow and bureaucratic, several of the public agency representatives indicated that the group may have moved too quickly. Despite their differences in perspective, the stakeholders’ commitment to providing a coordinated transit service remained steadfast throughout the course of the project and enabled them to overcome their differences.
  • Keep private partners at the table. A significant challenge for this project was keeping the casino properties on board, especially when working through difficulties with the technology and the declines in ridership associated with these problems. The fact that the casino properties provided operating funding made their involvement vital to the success of the CTS project. The interviews revealed that the congestion mitigation credits that businesses received for participating in CTS were a significant incentive for keeping private partner at the table. Development in the area is severely restricted, and credits are required in order to approve any additions to the casinos.
  • Consider a Participation Agreement for the Partners. In 1998, the stakeholders created a participation agreement to tie them together contractually. In order to opt out of the contract, a member must give 90 days notice to the board and must give evidence that the CTS is not meeting their needs from an operational and technical point of view. By making it more difficult for partners to walk away from the project, the Participation Agreement encouraged partners to resolve their problems.
  • Be aware of turnover within the private sector management. A significant challenge for the CTS Board has been the frequent turnover of the general managers of the casino properties. The recurrent movement of general managers makes it challenging to obtain buy-in from the upper level management of the casino property. With each new general manager, there is uncertainty regarding support for the project, and the CTS Board must justify to the new manager the casino’s contribution of operating funding to the project.
  • Include stakeholders with transit experience on the managing board. While the CTS Board was generally viewed as an effective institutional arrangement, the lack of transit management experience caused project setbacks. Originally the planners of the system were comprised of marketing and business experts, who lacked a transit or transportation background, and so the design of the system had to be redone, which wasted transportation funding.
  • Recognize the importance of strong leadership. The success of the Board was due in large part to the strong leadership of the Board chairperson and his ability to understand and articulate the perspectives of both the public and the private partners. While views differed on whether a single leader or "leadership by committee" was preferred, all stakeholders agreed that the Chairperson provided strong leadership, energizing the group and maintaining a consensus-based vision for CTS. This enabled the Board to act on problems more effectively and to develop viable solutions to problems.
Public-Private partnerships can provide a valuable opportunity, often bringing together the resources necessary to get a project off the ground. At the same time, the CTS project illustrates that there are numerous issues in sustaining such partnerships. Stakeholders noted their concerns regarding the differing perspectives of public versus private entities, the challenge of keeping private partners at the table, and turnover within private sector management. Other institutional issues included the need for strong leadership and for transit experience on the managing board. Through recognizing and addressing these institutional issues, agencies will be able to successfully develop and maintain partnerships, and contribute to the success of a mutually beneficial transit system.


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Source

Evaluation of the South Lake Tahoe Coordinated Transit System (CTS) Project Phase III Evaluation Report

Author: Rephlo, J., and D. Woodley

Published By: U.S. DOT Federal Highway Administration

Prepared by SAIC for the USDOT FHWA

Source Date: 4/14/2006

EDL Number: 14316

URL: http://ntl.bts.gov/lib//jpodocs/repts_te/14316.htm

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Lesson Contacts

Lesson Analyst:

Margaret Petrella
RITA/Volpe National Transportation Systems Center
617-494-3582
petrella@volpe.dot.gov


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Lesson ID: 2008-00434