progress update and discussion of technical memorandum 5a

July 26, 2006July 26, 2006July 26, 2006

Progress Update and Discussion ofTechnical Memorandum 5a – Draft Economic Impacts of

Goods Movement

Progress Update and Discussion ofProgress Update and Discussion ofTechnical Memorandum 5a Technical Memorandum 5a –– Draft Economic Impacts of Draft Economic Impacts of

Goods MovementGoods Movement

MCGMAP SAG Meeting July 26, 2006

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MCGMAP OverviewMCGMAP Overview

Goods Goods Movement Movement

Action Action PlanPlan

Mitigation of community and Mitigation of community and environmental impacts environmental impacts

Develop a:Develop a:

Efficiency and productivity of goods Efficiency and productivity of goods movement throughout the study areamovement throughout the study area

Will include capital and nonWill include capital and non--capital optionscapital options

Solutions will address all modesSolutions will address all modes

MMAAXXIIMMIIZZEESS


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What About the MCGMAP is New?What About the MCGMAP is New?

Collaborative effort between 6 Counties, SCAG Collaborative effort between 6 Counties, SCAG and and CaltransCaltrans toward toward systemwidesystemwide solutionssolutions

Seeking input from all stakeholdersSeeking input from all stakeholders

Acknowledges ongoing local, regional, and Acknowledges ongoing local, regional, and State effortsState efforts

Goal of reaching consensus for regional Goal of reaching consensus for regional solutions & financingsolutions & financing


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3. Compile and Collect Goods Movement Data 3. Compile and Collect Goods Movement Data

2. Outreach Assistance2. Outreach Assistance

1. Project Management / Administration1. Project Management / Administration

4. Assess Growth in Freight Demand4. Assess Growth in Freight Demand

5. Community, Environmental, & Economic Impacts 5. Community, Environmental, & Economic Impacts

6. Strategies for Improving Goods Movement6. Strategies for Improving Goods Movement

7. Mitigating the Effect of Goods Movement 7. Mitigating the Effect of Goods Movement

Building an Action PlanBuilding an Action Plan

MultiMulti--County Goods County Goods Movement Action Plan Movement Action Plan 8.8.


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MCGMAP Study AreaMCGMAP Study Area


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Task 2 Task 2 –– Outreach AssistanceOutreach Assistance

First round of surveys completedFirst round of surveys completed

Targeted stakeholder audienceTargeted stakeholder audience

159 surveys received to date159 surveys received to date

Validates many of the issues to be discussed todayValidates many of the issues to be discussed today

Another survey later in the study to focus upon Another survey later in the study to focus upon solutions and strategiessolutions and strategies


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Task 3 Task 3 –– Existing Conditions Existing Conditions and Constraintsand Constraints

Status UpdateStatus UpdateFinal Tech Memo to be delivered to TAC by July 31, 2006Final Tech Memo to be delivered to TAC by July 31, 2006


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Scenario 1: High Growth - Current Investment Levels

Scenario 2: Low Growth – Current Investment Levels

Scenario 3: Moderate Growth - Current Investment Levels

Scenario 4: High Growth - Full Investment Levels

Task 4 Task 4 –– Growth in Freight DemandGrowth in Freight Demand

SCENARIOS FOR STRATEGY EVALUATION


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Task 5 Task 5 -- Environmental & Community Environmental & Community ImpactsImpacts

Technical Memo 5b In-Progress

Incorporating What We Heard

Active Developments Ports Clean Air Action PlanSB 1266 – Highway Safety, Traffic Reduction, Air Quality, & Port Security Bond Act of 2006


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Agency Environmental PlansAgency Environmental Plans

Plan Focus

Cal/EPACal/EPA--BTH GMAPBTH GMAP

CARB Emissions CARB Emissions Reduction PlanReduction Plan

MCGMAPMCGMAP

Ports Ports CAAP CAAP

SCAQMD SCAQMD AQMP AQMP

Statewide GMStatewide GM

Study Area GMStudy Area GM

San Pedro Bay PortsSan Pedro Bay PortsEmissionsEmissions

South Coast Air BasinSouth Coast Air BasinEmissionsEmissions

Statewide Ports & GMStatewide Ports & GMEmissionsEmissions


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Agency Environmental PlansAgency Environmental PlansImplementation of Plans, Excluding MCGMAP

Cal/EPA-BTH Goods Movement Action Plan (Statewide GM)Preliminary Working List of Candidate ProjectsCost : $ 15BCommitted: $1.95B – previously committed public fundingProposed Bond (S.B. 1266)1:

$2B Trade Corridors Improvement projects (1:1 matching)$1B AQ improvements (no matching)

Other Funding Strategies: RegulationsIncentivesFederal fundingUser-based feesMarket-based approaches

CARB Emissions Reduction Plan is basis for Cal/EPA-BTH GMAP

1 Senate Bill 1266 revised the originally proposed Cal/EPA-BTH GMAP funding.


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Agency Environmental PlansAgency Environmental PlansImplementation of Plans – Continued

1 Economic benefits due to the avoidance of adverse health impacts in terms of cost.

CARB Emissions Reduction Plan for Ports & Goods Movement in California

Cost to Implement over 15 years: $6B to $10BEconomic-Health Benefits1 over 15 years: $34B to $47BCommitted: N/AFunding Strategies: Industry investment

State bond (pending)Container fees?

Federal fundingOther user feesMarket-based approaches?

SCAQMD Air Quality Management Plan (2003)Emission “budgets” for SIP conformityCost & Funding not addressedEmissions inventories resulting from MCGMAP strategies will not be incorporated into the 2007 AQMP2 due to timing issues.

2 2007 AQMP is currently in development. Public release of draft AQMP due October 2006 , Board action Feb/Mar.2007, and due to U.S. EPA June 2007.


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Agency Environmental PlansAgency Environmental PlansImplementation of Plans - Continued

San Pedro Bay Ports Clean Air Action Plan5-Year Program – $194M to $2.6BCommitted: POLB $181M

POLA $177.4MSCAQMD $ 36M1

Developed jointly between Ports & SCAQMD

$1.6B Shortfall

1 Initial commitment with additional AQMD funding to be determined.


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Building an Action PlanBuilding an Action Plan

3. Compile and Collect Goods Movement Data 3. Compile and Collect Goods Movement Data

2. Outreach Assistance2. Outreach Assistance

1. Project Management / Administration1. Project Management / Administration

4. Assess Growth in Freight Demand4. Assess Growth in Freight Demand

5. Community, Environmental, & Economic Impacts 5. Community, Environmental, & Economic Impacts

6. Strategies for Improving Goods Movement6. Strategies for Improving Goods Movement

7. Mitigating the Effect of Goods Movement 7. Mitigating the Effect of Goods Movement

MultiMulti--County Goods County Goods Movement Action Plan Movement Action Plan 8.8.


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Draft Tech Memo 5a Draft Tech Memo 5a –– Economic Impacts of Economic Impacts of Goods MovementGoods Movement


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Two of Southern CaliforniaTwo of Southern California’’s s Major DifficultiesMajor Difficulties

Environmental & HealthSubject Discussed In Last Session

Falling Living Standards Of Those Without College TrainingSubject of Discussion Today


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1969

1970

1971

1972

1973

1974

1975

1976

1977

1978

1979

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

02468

101214161820

Source: Southern California Association of Governments

Exhibit 8.-Per Capita Income Rank, 1969-2003SCAG Rank of 17 Consolidated Metropolitan Areas

17th = worst

So. CaliforniaSo. California’’s Falling Economic Status Vs. Other U.S. Multis Falling Economic Status Vs. Other U.S. Multi--County AreasCounty Areas


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62.9%

49.4% 49.1% 47.2% 43.8%36.5% 36.0% 35.9%

Imperial (1) Riverside San BernardinoLos Angeles So. California Ventura Orange San Diego

(1) Imperial County for 2000, Not In Southern California AverageSource: American Community Survey, U.S. Census Bureau

Exhibit 1.-Schooling Ended At High School or LessAdults 25 & Over, Southern California Counties, 2004

Key Labor Force Issue: Key Labor Force Issue: Adults With High School Diploma or Less SchoolingAdults With High School Diploma or Less Schooling


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Why do Economists Why do Economists Study Income MobilityStudy Income Mobility

“Rich, Poor Living Poles Apart In L.A. as Middle ClassDwindles” Brookings Institute Study

LA Times July 23, 2006


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Keys To Upward Economic Mobility Workers Keys To Upward Economic Mobility Workers With High School Diploma or Less SchoolingWith High School Diploma or Less Schooling

1. Southern California Based Work

2. Good Entry Level Pay

3. Defined Skill Ladder

4. Move Up In Pay By Learning On The Job

5. Technology Using Sector


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Sectors with Few Training Barriers to Sectors with Few Training Barriers to Beginning EmploymentBeginning Employment

Mining $90,491Manufacturing $48,397Logistics $47,411Construction $42,714Gaming $29,785Retail Trade $28,108Hotel/Motel $24,108Agriculture $23,474

Blue Collar

MeanMeanAnnual IncomeAnnual Income


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$1,284,396,426

$909,813,831

($118,523,490)

Construction LOGISTICS GROUP Manufacturing

Sources: CA Employment Development Department, U.S. Railroad Retirement Board, U.S. Bureau of Economic AnalysisU.S. Bureau of Economic Analysis, 2002 Economic Census, U.S. Census Bureau

Exhibit 16.-Change in Blue Collar PayrollsSouthern California (7-Counties), 2001-2005

Total Payroll Growth:Total Payroll Growth:Main Blue Collar SectorsMain Blue Collar Sectors


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Manufacturing Jobs, 1990Manufacturing Jobs, 1990--20052005

Lost: 361,300 of 1,279,600 in 1990 = -28%

(84,500)(73,500)

(64,200)

(19,200)

7,60024,000

33,300 27,100

(13,500)(3,000)

(47,400)

(72,500)

(48,900)

(12,700)(13,900)

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005Source: CA Employment Development Department

Exhibit 4.-Manufacturing Employment ChangeSouthern California, 1990-2005

China & India Now Allowing Their Entrepreneurs To Compete


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Logistics Sector CharacteristicsLogistics Sector Characteristics

407,771

93,294

53,986

36,425

33,914

25,561

9,023

1,876

661,850

Wholesale trade

Truck transportation

Support activities for transportation

Warehousing and storage

Couriers

Air transportation

Rail transportation

Water transportation

LOGISTICS GROUP


Exhibit 11.-Employment By Logistics SectorSouthern California (7-Counties), 2005


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$71,871

$50,703

$49,011

$48,259

$47,411

$41,797

$39,802

$37,136

$36,317

Rail transportation

Wholesale trade


Air transportation

LOGISTICS GROUP



Couriers



Exhibit 12.-Mean Average Pay Per Worker By Logistics SectorSouthern California (7-Counties), 2005

Logistics SubLogistics Sub--Sector PaySector Pay


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Logistics SubLogistics Sub--Sector Payroll GrowthSector Payroll Growth

23.3%

17.0%

15.8%

13.5%

13.4%

13.2%

13.1%

-1.0%

-29.7%



Wholesale trade


Couriers

Rail transportation

LOGISTICS GROUP


Air transportation


Exhibit 14.-Percent Gain in Payroll by Logistics SectorSouthern California (7-Counties), 2001-2005


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Median Pay By EducationMedian Pay By EducationWholesale TradeWholesale Trade

7.50%6.30%4.70%1.20%4.50%5.60%

26.30%43.90%

100.00%80.60%

5.70%13.70%

Bachelor's Degree $27.87 Work Experience & Bachelor's or Higher $44.14

Associates Degree $21.05 Post-Secondary Vocational Education $19.85

Moderate-Term On-the-Job Training $21.49 Long-Term On-the-Job Training $27.80

Short-Term On-the-Job Training $11.65 Work Experience Related Occupation $20.37

No Schooling After High School $15.67 Wholesale Trade Sector $19.17

Bachelor's Or More $36.72 Trade or Community College $26.43

Entry Level


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Fixed Site Operations 30.30% $15.60 $32,446 Trucking or Field Operations 9.10% $14.87 $30,938 Administration & Admin Support 16.90% $19.19 $39,910 Sales & Customer Support 27.60% $23.17 $48,196 Craft & Repair 6.40% $19.60 $40,762 Finance & Information 9.60% $22.74 $47,307

Median Pay by FunctionMedian Pay by FunctionWholesale TradeWholesale Trade


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Square Feet Per Job NeededSquare Feet Per Job Needed

9211,095 1,033

1,167

885775

1,212994 1,015

1,263 1,309

650529 491

901

1994

1995

1996

1997

1998

1999

2000

1994

-2000

2001

2002

2003

2004

2005

2006

2001

-2006

Source: CB Richard Ellis, Grubb & Ellis, Cushman & Wakefield, Lee & Associates, IEEP, Economics & Politics, Inc.

Exhibit 26.-Square Feet Per JobManufacturing Sector, Inland Empire, 1994-2006

1,7321,872

2,165

1,675

2,034

2,434

1,8681,994

1,883

2,2792,400

2,5542,444

2,292 2,284

1994

1995

1996

1997

1998

1999

2000

1994

-2000 2001

2002 2003

2004

2005

2006

2001

-2006

Source: CB Richard Ellis, Grubb & Ellis, Cushman & Wakefield, Lee & Associates, IEEP, Economics & Politics, Inc.

Exhibit 27.-Square Feet Per JobLogistics Sector, Inland Empire, 1994-2006


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What Drives Demand?What Drives Demand?

1. Population Growth 2000-2030: 7.3 million

2. So. Calif. Retail Per Capita after inflation (1994-2004): +24.5%

3. E-Commerce (2000-2006): 27.9% per year

4. Inventory:Sales Ratio (1990-2005): 20.3% drop per $1 of Sales

5. Port Container Volume (2000-2005): +8.5% per year

6. Port Breakbulk Tonnage (1995-2005): +2.5% per year

7. Air Cargo Tonnage Forecast (2005-2030): +4.6% per year

8. Local Manufacturing: Only driver in decline


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Gold Mine Theory of Local EconomicsGold Mine Theory of Local Economics

Primary Tier

Secondary Tier


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Southern CaliforniaSouthern CaliforniaEconomic Impact, 2003Economic Impact, 2003

Logistics Alone: $90 billion or 6.6% of Economic Activity

687,837 or 6.1% of Jobs

$11 billion or 17.8% of Local Taxes & Fees

With Indirect/Induced: $170 Billion or 12.4% of Economic Activity

1,441,016 or 12.7% of Jobs

$15 billion or 23.5% of local Taxes & Fees


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MultipliersMultipliers

OverallEconomic Activity (Energy): 1.97Employment 2.19

SectorsActivity 1.95

Jobs 2.29Activity 2.05






Jobs 1.66

Truck Transportation

Couriers

Warehousing & Storage

Wholesale Trade

Air Transportation

Rail Transportation

Water Transportation


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Port: Multiplier ImplicationsPort: Multiplier Implications

1. Cargo Trucked To Warehouses or Transloading Facilities Generates Most Economic Impact & Jobs

2. On-Dock Loaded Rail Cargo Generates Little Economic Impact or Jobs as Quickly Leaves Region

Exception: If On-Dock Loaded Rail Cargo is Short HauledInland for Further Processing, Then Economic Impact & Jobs Created


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Next Steps (Economics) Next Steps (Economics)

1. 1. Establish Forecast Scenarios

2. Determine Economic & Job Impact of Logistics Changes

3. Determine Economic & Job Impact of Capital Projects

4. Determine Cost of Environmental Mitigation

5. Determine Economic & Job Impact of Mitigation


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Other Tasks in ProgressOther Tasks in Progress


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Task 6 Task 6 –– Identify and Evaluate Strategies Identify and Evaluate Strategies for Improving Goods Movementfor Improving Goods Movement

Working with project partners to identify potential Working with project partners to identify potential projects and environmental mitigationprojects and environmental mitigationFocus on identifying regional solutionsFocus on identifying regional solutions

Task 7 Task 7 –– Identify Strategies for Mitigating the Identify Strategies for Mitigating the Effect of Goods Movement on Local Communities Effect of Goods Movement on Local Communities

and the Environmentand the EnvironmentGoal: Maximizes both the economic opportunities Goal: Maximizes both the economic opportunities associated with goods movement, as well as opportunities associated with goods movement, as well as opportunities to reduce the associated environmental and community to reduce the associated environmental and community impactsimpacts


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End ProductEnd Product

>> WhatWhat –– Reach consensus on projects, strategies and Reach consensus on projects, strategies and options for implementationoptions for implementation

>> WhenWhen –– Fall 2006: Develop projects, strategies and Fall 2006: Develop projects, strategies and options for evaluationoptions for evaluation

Winter 2007: Complete MultiWinter 2007: Complete Multi--County Goods County Goods Movement Action PlanMovement Action Plan

>> HowHow –– Develop and maintain partnerships, seek Develop and maintain partnerships, seek innovative financing scenarios, complement innovative financing scenarios, complement State GM PlanState GM Plan


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Questions & AnswersQuestions & Answers

More Information: More Information: www.metro.net/mcgmapwww.metro.net/mcgmap


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progress update and discussion of technical memorandum 5a

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