Will Kempton, Former Caltrans Director, Assumes Leadership of OCTA

You assumed the position of OCTA CEO after having spent five years leading Caltrans. What led you to take this new county position after holding such a lofty position at the state?

As the head of Caltrans, I certainly had an opportunity to deal with major issues at the policy level. It is very productive, and certainly very engaging, to talk about the larger issues of transportation, finance, and broader program implementation, such as Prop 1B bonds.

But there is nothing that compares, in my view, to the experience that you get at an agency like OCTA, because you are actually responsible for getting project work done. It is kind of like the saying "all politics are local": All trips begin on the local system.

Above all else, I'm a builder. I like getting things done and seeing things happen.

The governor said about you: "Will has been an incredible driving force behind rebuilding California's infrastructure and especially instrumental in quickly moving federal stimulus dollars out the door to transportation projects around the state." I assume that includes, potentially, stimulus dollars for Orange County. Can you talk a little bit about what you bring by way of relationships and knowledge of the federal, state, and regional environment to this job in Orange County?

That is one of the reasons that the authority was interested in me taking over here in Orange County: because the fact of the matter is, I have established relationships not only within the state of California, but across the country.

Obviously, after 36 years in the transportation business, I have a lot of contacts. Clearly, my contacts in Sacramento are going to help on the issues that we are facing, predominately on the transportation finance side of things. My experience in Washington is going to help as we craft a new transportation reauthorization act in the next couple of months.

I expect, frankly, to be engaged at both the state and federal levels to maintain and cultivate those contacts and to influence public policy decisions to Orange County's advantage.

Randall Iwasaki has taken over your position as director of Caltrans. Talk a little bit about what you left in the drawer for him by way of outgoing advice.

Randy and I worked very closely together over the past five years. He is a terrific manager. He has 25 years of experience at Caltrans; he is going to be able to handle anything that comes along. Because we worked so closely together, Randy was in sync with most of the things I tried to do at Caltrans-to change the culture, to make the department more responsive, and to help Caltrans be a better partner in its dealing with local and regional agencies and with the contracting industry and construction folks.

Most people recognize that there has been a change at the state Department of Transportation in terms of that responsiveness and the agency's demonstrated capabilities. We shifted to a performance-based management structure that focuses people on performance metrics. An example of that are the contracts for delivery I signed with the 12 district directors. Prior to my arrival, Caltrans had been at about 88 to 90 percent of delivery on an annual basis. Once those contracts went into affect, we jumped up to 99.9 percent delivery. If you challenge people, if you give clear objectives and the support they need to achieve those objectives, they will perform.

Randy has a lot of challenges ahead—certainly, for example, continuing to implement the recovery act program and making sure those dollars get obligated and spent in a timely manner. The state is having some serious problems with transportation finance. Obviously the ability to continue to sell bonds-the Prop 1B bonds-is critical. Without the ability to sell those bonds in a timely way, the program will back up and we won't be able to get work out. In an economy where we are all experiencing great bid results, we should have everything out on the street but the kitchen sink to get project work underway. We should be taking advantage of an incredibly positive bid environment. Organizationally, there are some challenges that are there because the state is experiencing furloughs. That creates, obviously, morale problems, productivity issues, and things of that nature.

What are Orange County's shovel-ready projects awaiting recovery funds and future federal and state dollars should new transit funding become available?

The project that we put the stimulus money on in Orange County is the State Route 91 widening. We were able to focus dollars there quickly, which allowed us to take the money that was previously committed to that project and put it onto other projects. That allows us to expand the program and get more accomplished.

We have the widening of I-5 already under construction at the northern end of the county—the Gateway project. We are coming off of a very successful first sales tax program that completed all of the promised work, literally within both the time frame indicated and the budget. We even had some dollars left over where we were able to provide a bonus project with the widening of State Route 22, which was a big success here in the county. Given where we are with some of the other financial crises—primarily in transit programs—the ability to move some dollars around has been very helpful to us as we try to soften the blow of the impact in cuts to transit.

What is the current balance between rail and road programs in Orange County?

It's about 25 percent to transit and 75 percent, or so, to roads. It is tilted toward roads, and as you might imagine, in Southern California that is not an unusual number from a standpoint of expectations. But we still have been able to do a lot with our rail system through Measure M.

Where we are facing our biggest crisis at this point is within our transit program. Most of the money to support our transit operations comes from the sales tax, one way or another. Obviously those revenues are down.

How is OCTA engaged to shape the forthcoming federal reauthorization of the Surface Transportation Act?

First of all, we are engaged with our delegation and keeping them informed as to what our needs and issues are. We are also involved in a number of regional and statewide organizations. For example, we are active members of Mobility 21. That organization is one of the focal points for communicating our needs and desires at the federal level. We are also going to participate in other statewide groups and associations that have a voice in Washington and can carry the interests of OCTA.

We have been working with the California Department of Transportation on a set of principles that all of the transportation interests in the state can agree with that we can communicate to our delegation in Washington. We regularly participate in a regional CEO group that develops some policy issues, highlights those issues, and discusses how we can influence decision makers in Sacramento and Washington. Our Board of Directors is actively engaged in the process as well. We will have substantial input.

This summer, TPR/MIR did interviews with Oregon Congressman Earl Blumenauer and with Art Leahy, your predecessor, about the reauthorization and the decision to delay the transportation bill's reauthorization. Can you talk about how those decisions will impact OCTA's plans?

Most prognosticators would say that we are probably not going to see an authorizing bill in the next several months, and potentially as long as 18 months, given where the administration and the Senate Environment and Public Works Committees are and notwithstanding Chairman Oberstar's desire to move the bill sooner. We are looking at potentially 18 months before we see a bill moving forward.

My concern is that we don't wait to have the necessary discussions for that period of time. Most of us in the transportation business would prefer to have a bill in place as soon as possible. Transportation has a long lead time, so we need to know what we are going to get, how much money is going to be available, and what the program requirements are. The earlier we know that, the earlier we can plan and get things underway. However, we have to let the process take its course until the economy improves, taking into account whatever the political reasons for this delay might be.

In that same interview with Congressman Blumenauer, he said that there were discussions about a $500 billion, six-year program, which is what most experts feel is within the ballpark of what we need and would allow renewed investment in the Highway Trust Fund. Is that about the size you think the bill should be, as the former Caltrans director and as the CEO of OCTA?

That is the size people are talking about. Frankly, we would like more support from the federal government. One of the things that they haven't taken into account, which we believe is absolutely essential for the new authorizing bill, is the goods movement issue.

There needs to be a national freight policy. That is absolutely vital. That $500 billion number would include a goods movement program. There is also a rail component of the program that needs to be sustained. We finally now have a situation where Amtrak doesn't have to fight for its very existence every year. We have a national passenger rail service that we can begin to count on. There are some programs that are available under some recent rail legislation at the federal level that will allow us to take advantage of some capital money from the feds. That is all very positive. Those are the sorts of things that need to be included in this bill. That $500 billion is the general consensus of the minimum needed from most of the national associations.

Let's turn to the California High-Speed Rail. Orange County was an early adopter of the project, moving forward with environmental reviews before many jurisdictions along the proposed route. Talk a bit about your hopes, expectations, and planning with respect to high-speed rail.

We are very excited about high-speed rail. You were right to point out that Orange County is at the leading edge in embracing high-speed rail and investing in advancing the project development so we can see an initial segment in place between Anaheim and Los Angeles as early as possible. We have contributed $7 million to move the environmental work forward. We expect that to be wrapped up next year. We are actually looking at some ancillary projects that impact our high-speed rail operations that we are trying to get underway even sooner. We think that the Anaheim to L.A. segment, given the progress that has been made on this piece, will rank very high in the American Recovery and Reinvestment Act (ARRA) applications that are due on October 2 to the Federal Railroad Administration.

California recently submitted 42 applications for the first round of funding under ARRA. That is hopefully going to provide additional money beyond high-speed rail-for positive train control and for some 18 local projects in Southern California. Those services, under the criteria that have been developed for ARRA funding, will help connect to high-speed rail. Those 18 projects include six Orange County projects that we are very excited about. If we are successful, we are looking at the potential of getting more than $4 billion for high-speed rail, which from a matching perspective, means we would get something along the lines of $2 billion for the Anaheim to Los Angeles piece alone. We are going to be working hard to make that happen.

The initial southern terminus of high-speed rail operations in California would be at Anaheim. We are developing the Anaheim Regional Transportation Intermodal Center, called ARTIC for the terminus. It is a grand station plan and design. It is going to be a beautiful landmark facility that will attract people from throughout Southern California and across the country. It is also going to be very functional in terms of providing an appropriate connecting terminus for high-speed rail operations in California.

In the interview with Congressman Blumenauer, we discussed public-and the congressman reacted to a quote from Kathleen Brown, now with Goldman Sachs, formerly State Treasurer. She said that public-private partnerships would fail at the polls very badly if so-phrased, and that we need to change the way we describe the program because it is otherwise politically dead on arrival as too partisan. You've dealt with this issue at Caltrans. Now looking at going forward and the need for capital for transportation and infrastructure, is there life to P3?

I hope there is, because it is absolutely vital that we have this tool available.

However you describe it, nobody likes tolls and nobody likes taxes. But the fact of the matter is, if we are going to attract the private investment that's available to help us deal with some of our infrastructure needs in this state and across the country we need to have the ability to do P3s.

However, they are not the only answer. The Bush Administration, as it was leaving office, tried to make the case that privatization is the way of the future and it will save us by meeting our infrastructure needs. I don't believe that. It is one tool in the box, but it is a very important tool.

In California, there are a lot of folks that have been very interested in investing private dollars in infrastructure, but those private investments typically require some means of paying those investors back. That equates to either availability payments out of existing revenues or it equates to tolls. That is problematic for a lot of people.

I absolutely believe that P3s are an important part of the equation when it comes to meeting our infrastructure needs, but they are not the sole answer.

Linking to that, Los Angeles County Metro recently approved a toll-pricing scheme for stretches of freeway around Downtown, on the I-10 and I-110. Given your experience and what you have in Orange County, what are your thoughts on demand management and tolling as a means for both controlling congestion and generating revenue?

It is a very viable mechanism for capacity enhancement.

I was involved at the state level in helping to obtain those funds for LA. I am hopeful that the projects on the I-10 and I-110 are very successful. This is a good opportunity for the state to benefit from a demonstration that hopefully will show how effective congestion pricing can be in moving people and goods. And I hope we will get some positive results from those demonstration projects.

From the Orange County experience, what is essential for that demonstration to be successful?

One of the things that I recommend as part of the program is public outreach and education—making sure that people understand what these projects are about and what they are intended to accomplish. Certainly, the user needs to be aware of the benefits of the project and the opportunities that will result.

OCTA operates one toll facility but we have other toll roads in the county run by the Transportation Corridor Agencies. On our project, the 91 Express Lanes, we have had a great experience and a very profitable congestion management operation. The rate of use is fixed over the course of the day, depending on the time of the day, but those Express Lanes on the 91 corridor are well-utilized. The 91 freeway would not work without the Express Lanes in place. We simply would not be able to move people through that bottleneck as well as we are with the facility in place.

Riverside County has now taken up the gauntlet under legislation that the governor was successful in getting through the Legislature in February; they are going to undertake an extension of those Express Lanes into Riverside County.

You're going to speak at Mobility 21, which was originally conceived by LA County and Roger Snoble, but has now grown to be a multi-county effort. How difficult is it to speak with one voice to our legislators in Washington, for a metropolis of 17 million people here in Southern California?

That is a tough nut to crack. You're astute to recognize that, the many different organizations, geographical differences, and regional needs that exist here in Southern California. It makes it tough on California's delegation.

Our state delegation is obviously the largest in Congress. You'd think that California should have a lot of clout; we ought to be able to get a lot of the things that we want. But unfortunately, in the past, we have spoken with multiple voices.

We have the Northern California members of Congress who are getting perhaps a different message on issues than those messages provided to our delegation here in the south. The efforts by the administration and Caltrans to come together on some basic principles that everyone can support is a really good approach to delivering a common message to our delegation.

The Mobility 21 coalition, which Roger was instrumental in developing, allows us to speak with a more singular voice that is relative to Southern California's needs. When you have the ability to draw those different needs together as a single message, it is very helpful to our delegation. By extension, then our delegation becomes much more powerful by advocating for a more singular objective.

When we speak together a year from now, what will we talk about? What imprint would you like to have made on the agency in your first year?

The first imprint I want to make on the agency is to deal with the transit crisis we face here in Orange County and that we face, frankly, across the state and the nation.

With the state's action to take away the transit assistance program, which significantly hampered our ability to sustain a viable transit operation, we are scrambling to see what steps we can take to become as efficient and lean as possible, but also to see how we can provide additional resources. If we cannot restore transit funding in the short term, over the long haul we are not going to meet some of the public policy objectives that the state is also mandating with respect to AB 32, the greenhouse gas emission reduction targets, and SB 375, which require sustainable community strategies to meet reduction targets. They cut the transit funding and expect us to reduce greenhouse gases? These issues go hand in hand.

We need to have state financial support for transit operations. We have a very significant transit-dependent population in Orange County. I would hope that a year from now when you and I talk, we can say that we have weathered that storm and are on our way to restoring a sustainable and growing source of funding for transit.