Congestion Pricing:

A PRIMER:

EFFECTIVE APPROACHES TO STREAMLINING 

BACK OFFICE OPERATIONS
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Congestion Pricing – A PRIMER: EFFECTIVE APPROACHES TO 

STREAMLINING BACK OFFICE OPERATIONS

COTM: Ms. Angela Jacobs, Federal Highway Administration

While project managers for congestion pricing strategies and systems are focused on traffic management, technology, toll rates, 

and design, other critical issues related to operations, policy, and rapidly changing technology tend to arise. In this primer, 

these challenges are collectively referred to as “Back Office Issues” as they impact operations that are behind the scenes in the 

“back office.” The following eight such topic areas are discussed in detail in this primer: Policy Decisions Drive Business Rules, 

Interoperability, Back Office Efficiency, Enforcement, Data Analysis and Warehouse, Transparency, Privacy, and Private Sector 

Involvement. The primer also includes complete case studies for each topic area describing experiences of implementing agencies. The reader is encouraged to identify elements of the case studies that are similar to what his/her agency may be dealing 

with on local congestion pricing projects. 

Leidos

11251 Roger Bacon Drive, 3rd Floor

Reston, VA 20190

United States Department of Transportation

Federal Highway Administration

1200 New Jersey Ave., SE

Washington, DC 20590

Myron Swisher, Cara O-Donnell, Jennifer Symoun, Julie Lambert

Road pricing, congestion pricing, priced managed lanes, 

parking pricing

No restrictions.

Unclassified Unclassified 52 N/A

March 2016

DTFH61-12-D-00050

HOTM

2. Government Accession No. 3. Recipient’s Catalog No.

Primer, October 2013 – January 2016

CONGESTION PRICING A Primer on Back Office Issues | iii

Table of Contents

The Primer Series and the Purpose of this Volume ..................................................................01

Introduction..................................................................................................................................03

TYPES OF BACK OFFICE ISSUES........................................................................................03

ORGANIZATION OF THE PRIMER.......................................................................................04

TOPIC AREA 1: Policy Decisions that Drive Business Rules .................................................05

TOPIC AREA 2: Interoperability ..............................................................................................09

TOPIC AREA 3: Back Office Efficiency....................................................................................13

TOPIC AREA 4: Enforcement....................................................................................................17

TOPIC AREA 5: Data Analysis and Warehousing ...................................................................21

TOPIC AREA 6: Transparency ..................................................................................................25

TOPIC AREA 7: Privacy.............................................................................................................31

TOPIC AREA 8: Private Sector Involvement...........................................................................35

Lessons Learned...........................................................................................................................39

References and Resources...........................................................................................................41

REFERENCES ..........................................................................................................................41

RESOURCES ...........................................................................................................................41

Appendix.......................................................................................................................................43

Photo source: Carol Zimmerman
iv | CONGESTION PRICING A Primer on Back Office Issues

List of Figures

Figure 1. Photo. I-495 Express Lanes transition.......................................................................02

Figure 2. Photo. An E-ZPass Express Toll Lane in Virginia. ...................................................04

Figure 3. Photo. A gantry-mounted sign above a lane that offers E-ZPass full service to 

drivers...........................................................................................................................05

Figure 4. Photo. Example of a tolled high-occupancy vehicle lane separated by lane 

markings from normal travel lanes. ..........................................................................06

Figure 5. Photo. Toll plaza on Virginia’s Chesapeake Expressway. ........................................10

Figure 6. Photo. Changeable displays on an overhead gantry indicate the cost of using 

SunPass tolled lanes in Florida...................................................................................14

Figure 7. Photo. Video and transponder detection devices mounted on an overhead gantry...

.......................................................................................................................................18

Figure 8. Photo. An SFPark parking meter. ..............................................................................22

Figure 9. Map. An SFPark operational area and information on rates by time period........22

Figure 10. Photo. An express bus travelling in tolled lanes on a Florida highway.................26

Figure 11. Illustration. A dynamic traveler information sign indicates the amount of time 

it will take to reach a destination via high-occupancy vehicle lanes versus normal 

travel lanes. ..................................................................................................................27

Figure 12. Photo. A sign on a gantry shows rates for using a high-occupancy toll lane to 

reach different destinations. .......................................................................................29

Figure 13. Photo. Entrance to the SunPass Express TollLanes on I-95. .................................31

Figure 14. Photo. Video and transponder detection devices mounted on an overhead gantry 

on the I-495 Express Lanes in Virginia......................................................................32

Figure 15. Photo. A dynamic sign mounted on a gantry depicts the cost to travel to different 

destinations using the I-495 Express Lanes...............................................................36

List of Tables

Table 1. National Congestion Pricing Conferences attendees..................................................41
CONGESTION PRICING A Primer on Back Office Issues | 01

States and local jurisdictions are increasingly 

discussing congestion pricing as a strategy for 

improving transportation system performance. In 

fact, many transportation experts believe that 

congestion pricing offers promising opportunities 

to cost-effectively reduce traffic congestion, 

improve the reliability of highway system 

performance, and improve the quality of life for 

residents, many of whom are experiencing 

intolerable traffic congestion in regions across 

the country. 

Because congestion pricing is still a relatively 

new concept in the United States, the Federal 

Highway Administration (FHWA) is embarking 

on an outreach effort to introduce the various 

aspects of congestion pricing to decision makers 

and transportation professionals. One element of 

FHWA’s congestion pricing outreach program is 

this Congestion Pricing Primer series. The aim of 

the primer series is not to promote congestion 

pricing or to provide an exhaustive discussion of 

the various technical and institutional issues one 

might encounter when implementing a particular 

project; rather, the intent is to provide an 

overview of the key elements of congestion 

pricing, to illustrate the multidisciplinary aspects 

and skill sets required to analyze and implement 

congestion pricing, and to provide an entry point 

for practitioners and others interested in 

engaging in the congestion-pricing dialogue. 

The concept of tolling and congestion pricing is 

based on charging for access and use of our 

roadway network. It places responsibility for 

travel choices squarely in the hands of the 

The Primer Series and the

Purpose of this Volume

About This Primer Series

The Congestion Pricing Primer Series is part 

of FHWA’s outreach efforts to introduce the 

various aspects of congestion pricing to 

decision makers and transportation 

professionals in the United States. The 

primers are intended to lay out the underlying 

rationale for congestion pricing and some of 

the technical issues associated with its 

implementation in a manner that is accessible 

to non-specialists in the field. Titles in this 

series include:

• Congestion pricing overview.

• Economics: pricing, demand, and economic 

efficiency.

• Non-toll pricing.

• Technologies that enable congestion 

pricing.

• Technologies that complement congestion 

pricing.

• Transit and congestion pricing.

• Income-based equity impacts of congestion 

pricing.

• Congestion pricing institutional issues.

• Evolution of second generation pricing 

projects.

• Congestion pricing: effective approaches to 

streamlining back office operations.

The primers are available on the FHWA 

Congestion Pricing web site: http://www.ops.

fhwa.dot.gov/congestionpricing/resources/

primers_briefs.htm.
02 | CONGESTION PRICING A Primer on Back Office Issues

individual traveler, where it can best be decided 

and managed. The car is often the most 

convenient means of transportation; however, 

with a little encouragement, people may find it 

attractive to change their travel habits, whether 

through consolidation of trips, car-sharing, by 

using public transportation, or by simply 

traveling at less congested times. The use of 

proven and practical demand-management 

pricing that we freely use and apply to every 

other utility is needed for transportation. 

Applying tolling and road pricing to solve local 

transportation and sustainability problems gives 

localities the opportunity to address 

transportation problems without Federal or State 

funding. It could mean that further gas tax, sales 

tax, or motor vehicle registration fee increases 

are not necessary now, or in the future. 

Congestion pricing is a first step, not a complete 

plan of action. It has to be coordinated with other 

policy measures and environmental measures for 

sustainability. 

While project managers for congestion pricing 

strategies and systems are focused on traffic 

management, technology, toll rates, and design, 

other critical issues related to operations, policy, 

and rapidly changing technology tend to arise. In 

this primer, these challenges are collectively 

referred to as “back office issues” as they impact 

operations that are behind the scenes. There are 

eight such topic areas discussed in detail in this 

primer: policy decisions drive business rules, 

interoperability, back office efficiency, 

enforcement, data analysis and warehouse, 

transparency, privacy, and private sector 

involvement. The primer also includes case 

studies for each describing experiences of 

implementing agencies. Readers are encouraged 

to identify elements of the case studies that are 

similar to those they may be dealing with on 

local congestion pricing projects. 

Source: Transurban

Figure 1. Photo. I-495 Express Lanes transition.
CONGESTION PRICING A Primer on Back Office Issues | 03

set back as a result of not addressing back office 

issues up front in early concept stages. 

Overcoming these issues can present challenges 

even among agencies with previous experience 

on similar projects for the simple reason that the 

technology involved with back office operations 

evolves very rapidly. Therefore, flexibility must 

be built in during the development of congestion 

pricing projects and systems.

Reevaluation of project policies and business rules 

is often necessary as agencies strive to adjust to 

these changing conditions. This can result in 

additional media coverage and recurring political 

debate on operational congestion pricing projects. 

Even in cases where broad stakeholder buy-in has 

been developed for the project and its primary 

objectives, this renewed scrutiny can complicate 

the issues and lead to delays in deployment. 

TYPES OF BACK OFFICE ISSUES

Implementing congestion pricing projects 

requires a combination of good planning, proven 

technical capabilities, and reliable day-to-day 

operations. Equally important is the ability to 

work through a wide variety of back office issues 

that can arise at any point in the process. 

Congestion pricing projects are different from 

many other transportation projects: they 

represent a new way of managing travel demand; 

they require daily, hourly, or even constant 

monitoring; and they deal explicitly with money. 

All of these factors produce an inordinate 

amount of attention by decision makers, the 

media, and the public. 

Introduction

The Congestion Pricing Primer Series is written 

with the transportation agency project manager 

in mind. While most project managers are 

experienced with traditional transportation 

projects, they (and their agencies) often have little 

or no experience with the concept of congestion 

pricing, managed lanes, or even tolling. Early in 

the development phases of these projects, the 

focus is typically and appropriately on traffic 

management, technology, toll rates, and design. 

These are the visible, up-front issues that would 

seem to be most closely related to the purpose 

and need of the congestion pricing projects. 

The Federal Highway Administration (FHWA) 

conducted a Tolling and Pricing Back Office 

Issues Peer Exchange in Hanover, MD, on 

May 6, 2014. Thirteen congestion pricing experts 

representing both public and private 

transportation agencies from around the United 

States gathered to discuss the range of back 

office operation challenges associated with a 

range of congestion pricing projects. 

Additionally, content for this primer was taken 

from presentations that were given at the 

National Congestion Pricing Conference in 

Seattle, WA, on July 9-11, 2013.

Collective experience from dozens of congestion 

pricing projects deployed in the past decade, 

however, revealed that other issues need to be 

addressed early in project development. As with 

institutional issues (the subject of a previous 

primer), the back office issues described in this 

primer tend to emerge well into the planning and 

design phases. In some cases, projects have been 
04 | CONGESTION PRICING A Primer on Back Office Issues

This primer will explore the range of back office 

issues that have arisen on congestion pricing 

projects throughout the United States. These 

issues were examined through a variety of 

sources: interviews with practitioners, the 

FHWA-sponsored National Congestion Pricing 

Conference (2013), and a peer exchange. 

Through this research, the back office issues fall 

into the following general topic areas:

• Policy decisions that drive business rules.

• Interoperability.

• Back office efficiency.

• Enforcement.

• Data analysis and warehousing.

• Transparency.

• Privacy.

• Private sector involvement.

ORGANIZATION OF THE PRIMER

This primer contains eight sections, with each 

being dedicated to one of the back office issues 

listed above. Each section provides insight into 

how dealing with the respective issue directly 

within the project development process can lead 

to a more successful congestion pricing project. 

Each section also provides a strategy-specific 

example illustrating how the issue has been 

handled in an existing congestion pricing project. 

The primer concludes with a section on lessons 

learned that summarizes the key points identified 

for each back office issue in the form of an 

action-oriented project manager’s checklist. 

Source: Virginia DOT

Figure 2. Photo. An E-ZPass Express Toll Lane 

in Virginia.
CONGESTION PRICING A Primer on Back Office Issues | 05

Transportation agencies that are developing and 

implementing managed lane projects and other 

market-based pricing strategies will face policy 

decisions, small and large, that directly impact 

operations. In this context, the term “back 

office” refers to functions that relate to facility 

tolling and fee collection equipment and 

technology to complete transactions. Such 

functions are not typically visible to the public, 

hence the term “back office”. This chapter 

describes how various policy decisions affect 

multiple back office functions. 

Back office capabilities and business rules should 

be designed to support the policies of the 

operating agencies. Project managers view this 

as policy “framing” the development of business 

rules as there are practical limitations in directly 

linking the two. Toll rate setting tends to be a 

very political decision, and elected officials often 

set constraints (toll rate caps, limits on the 

frequency and rate of increase, etc.). Variable 

rate systems function best in managing traffic 

when left to actual market conditions to set rates. 

Some operating agencies in southern California 

have worked with their policy setting body to 

adopt a formula and process by which toll rates 

are to be adjusted, delegating responsibility to 

staff to set rates according to that formula. This 

“middle ground” approach allows quick 

response to changing traffic conditions while 

keeping elected officials in control of rate setting 

from a policy level. 

TOPIC AREA 1: 

Policy Decisions that Drive Business Rules 

Key Points

• Back office capabilities and business rules 

should be designed to support flexible 

operating agency policies. 

• Multiple partner agencies and tolling 

operators must work together to prevent 

conflicting project objectives.

• Tolling strategies and technology must be 

compatible for managed lane networks. 

• High-occupancy vehicle (HOV) 2+ to 3+ 

conversions are being implemented to meet 

both traffic management AND revenue 

requirements, but this further complicates 

enforcement.

• Tolling should be treated as a “business” with 

a need to meet varying customer expectations 

about toll payment. 

We are setting ourselves up for failure 

if we approach revenue generation and 

mobility management as competing. 

Source: Samuel Johnson, San Diego Association 

of Governments (SANDAG)

Source: Virginia DOT

Figure 3. Photo. A gantry-mounted sign above a lane 

that offers E-ZPass full service to drivers.
06 | CONGESTION PRICING A Primer on Back Office Issues

Several agencies implementing congestion 

pricing projects have teamed with the private 

sector for technical expertise as well as financial 

participation in order to accelerate deployment of 

needed infrastructure. Many operating agencies 

have adopted a project model through which they 

are attempting to operate their tolling facilities 

“as a business.” A related issue involves the 

primary objectives of the tolled facilities and has 

implications for toll-setting policy and the design 

and operations of back office functions. Many 

pricing projects have been deployed by public 

agency operators that are primarily focused on 

improving mobility, better utilization of existing 

infrastructure, and providing a reliable travel 

time for priority users of the system (such as 

transit, car, and tolled vehicles). Public agencies 

today are giving greater emphasis to revenue 

generation (as are private operators) to meet 

financial obligations and create more sustainable 

funding sources for projects.1 Some State 

departments of transportation (DOT) that are 

entering the priced managed lane industry have 

teamed with existing toll agencies for their 

tolling technology and back office functions. 

Existing business rules and technical capabilities 

of the toll agency may impact the back office 

functions of the new facility. There are often 

multiple agencies involved, each with dozens of 

business rules and varying facility-specific 

pricing structures and discount programs in 

place. Facility operators must be flexible enough 

to incorporate all of these variants into their back 

office functions. 

Priority for carpools is a key policy objective for 

many priced managed lane operators; however, 

there is a wide variance among agencies in terms 

of the business rules and back office processes in 

place to operate and enforce high-occupancy 

vehicle (HOV) strategies. Some agencies have 

changed occupancy requirements from 2+ 

1 Samuel Johnson, San Diego Association of Governments 

(SANDAG). FHWA Tolling and Pricing Back Office Issues Peer 

Exchange. Hanover, MD, May 6, 2014.

(minimum of 2 persons per vehicle for free or 

discounted access) to 3+ on existing highways 

when converting to priced managed lanes. This 

shift is driven primarily by the fact that the lanes 

could not produce enough revenue to cover 

capital and operating costs. Others have needed 

to increase occupancy to 3+ due to the fact that 

their existing HOV (2+) lanes were already 

congested in the peak periods, eliminating travel 

time advantages. 

Flexibility in policy decisions has been 

essential for Washington State Department 

of Transportation (WSDOT) in operating 

different types of tolled and managed 

facilities as a network. 

 Source: Patty Rubstello, WSDOT

Source: Minneapolis Start Tribune

Figure 4. Photo. Example of a tolled high-occupancy 

vehicle lane separated by lane markings from normal 

travel lanes.
CONGESTION PRICING A Primer on Back Office Issues | 07

Where multiple agencies and facilities are involved in systems of priced facilities, operators are 

striving to maintain as much consistency as possible for their customers. There is a significant benefit 

to having a single point of contact for the customer as well as cost savings to agencies that use a 

Centralized Service Center (CSC). Customer accounts, violation enforcement, disputes, and other 

contacts are best handled with a single point of contact. Drivers often do not know who the operator is 

for a specific roadway facility (priced or non-priced) and can be confused when there are multiple 

facilities and agencies involved. This can be a very complex process, particularly where multiple 

tolling technologies are available to the customer. Policy decisions become more challenging as CSCs 

are established and begin dealing with an array of business rules, fees, toll rate setting procedures, and 

enforcement strategies. However, agencies that shared information for this primer pointed out that 

regional consistency is the goal. They acknowledge that while not everything has to change, agencies 

do need to establish a structure that accommodates differences.2 

2 Samuel Johnson, SANDAG. FHWA Tolling and Pricing Back Office Issues Peer Exchange. Hanover, MD, May 6, 2014.
08 | CONGESTION PRICING A Primer on Back Office Issues

 Washington State Case Study3 

The Washington State Department of Transportation (WSDOT) got into tolling fairly recently, having 

“paid off” the State’s last toll facility a generation prior. In 2008, WSDOT had two tolled facilities 

operating (Tacoma Narrows, 2007 – traditional toll bridge and SR-167 HOT Lanes, 2008 – 

dynamically priced lane) with tolling systems and back office functions that supported the unique 

requirements of each of those individual facilities. 

When WSDOT was planning for its third tolled facility, the SR-520 bridge (full-facility tolling of 

existing bridge), the agency recognized the benefits of a consolidated, modernized back office 

approach. This project would introduce the post-payment option of receiving a bill in the mail and 

greatly increase the number of toll transactions to be processed. Their new back office operations 

would be able to handle the high volume of transactions that SH 520 would generate, support this new, 

more complex functionality, and allow for expandability for future tolled facilities. There were 

significant challenges with migrating from two existing sets of back office capabilities and functions 

to one consolidated back office for all three facilities. It was vital to gain a complete understanding of 

the existing business rules for each facility and then to determine how those rules would be affected 

by or conflict with new business rules.

WSDOT discovered that it is important to plan to be flexible with policy decisions. Stepping back 

and looking at everything in the State’s tolling program holistically was a better approach for WSDOT 

than looking at things on a project-by-project basis. As agency staff delved deeper, the big question 

became “Who really makes these policy decisions?” Many policies needed to be developed, so there 

was a need to determine who had the authority to make which decisions. Within the region, there have 

been numerous debates about the competing interests of revenue generation or congestion 

management. WSDOT found it to be very beneficial to reach out to other transportation agencies and 

learn from them regarding policies for their tolling and pricing programs.

“Tolling is really a business. What do you want your business to be? How customer-friendly should 

you be?” 4

In Washington, there were expectations from the State Transportation Commission and local 

agency partners that tolling should be a self-sufficient program. WSDOT management and tolling 

staff came to the realization that operations of a tolling network needed to be managed as a business 

as opposed to the traditional agency role of building and maintaining transportation assets (roadways, 

transit, and ferries). WSDOT speaks of tolling as a business because they are selling a product. 

Customers pay directly for a premium service and high-quality product in the form of travel time 

savings and a safe, reliable trip. WSDOT has learned that customers perceive toll dollars very 

differently than gas tax dollars. In addition, the agency found that customer expectations seem to 

change when they are paying a toll because the service provided also has a direct dollar value 

associated with it. 

Communicating the concept and objectives of WSDOT’s tolling network continues to be a challenge. 

Based upon the education that the drivers have, they understand the need to pay for a new bridge or 

roadway facility. They do not necessarily understand how tolling can also be used for congestion 

management. Since the SH 520 tolling operations began, WSDOT has maintained ongoing public 

information efforts focused on making customers aware of how the transportation system users have 

benefited from projects funded by the tolls. Their customers are aware that they continue to realize 

time savings benefits from the expanded tolling system.

3 Patty Rubstello, WSDOT. National Congestion Pricing Conference. Seattle, WA, July 9-11, 2013. And FHWA Tolling and Pricing Back 

Office Issues Peer Exchange. Hanover, MD, May 6, 2014.

4 Patty Rubstello, WSDOT.
CONGESTION PRICING A Primer on Back Office Issues | 09

TOPIC AREA 2: Interoperability

Interoperability among electronic toll collection 

systems on toll roads and managed lane facilities 

in a geographic area is important to the 

development of an effective regional road system. 

The ultimate goal of interoperability is for the 

customer to only have one account, with only 

one bill, and to be able to use any roadway—and 

eventually any parking and transit facilities—in 

the country.5 

As agency business rules and electronic toll 

technology continue to evolve, the challenges of 

interoperability increase. One of the most 

essential aspects of interoperability is to agree 

upon a compatible set of business rules. Part of 

achieving success is learning to give up a little bit 

of control—perfecting the art of compromise.6 

All E-ZPass States agree to one common brand 

and one set of business rules. This prevents the 

States from having to make individual 

agreements with each other; rather, they must 

simply agree to the same rules.7 Additionally, 

willingness to open the back office to the thirdparty commercial market can assist with 

normalizing business rules.8 Interoperability can 

be more easily achieved by commercial operators 

than by governments because there can be issues 

with cross-cutting between agencies to agree 

5 Samuel Johnson, San Diego Association of Governments. 

Federal Highway Administration (FHWA) Tolling and Pricing 

Back Office Issues Peer Exchange. Hanover, MD, May 6, 2014.

6 Diane Gutierrez-Scaccetti, Florida Department of Transportation 

(FDOT). FHWA Tolling and Pricing Back Office Issues Peer 

Exchange. Hanover, MD, May 6, 2014.

7 Tom Gugel, Maryland Transportation Authority. FHWA Tolling 

and Pricing Back Office Issues Peer Exchange. Hanover, MD, 

May 6, 2014.

8 Jack Opiola, D’Artagnan Consulting. National Congestion 

Pricing Conference. Seattle, WA, July 9-11, 2013.

Key Points

• Agencies must recognize that sharing 

resources and ideas through 

interoperability benefits both the agency 

and the customer.

• Aligning business rules is necessary for 

different facilities to work together 

successfully, even if they are using the 

same in-lane technologies.

• Cooperation and strategic thinking are 

necessary when agencies that use 

different technologies attempt to develop 

a regional network. 

• It is important to be open-minded and 

consider a balance of revenue, costs, 

risk, and the benefits to the customer. 

Successes have come from simple 

networking with neighboring agencies. 

• It may be necessary to retrofit 

technology so that all facilities work 

similarly in order to be interoperable 

throughout a region when tolling is 

implemented.

upon one set of business rules. In addition, while 

interoperability among multiple States offers the 

potential for increased revenue, such as from outof-State travelers that may avoid the managed 

lanes if they are not interoperable with the 

technology used in their State, there is also a risk 

of potential loss.9 

9 Diane Gutierrez-Scaccetti, FDOT. FHWA Tolling and Pricing 

Back Office Issues Peer Exchange. Hanover, MD, May 6, 2014.
10 | CONGESTION PRICING A Primer on Back Office Issues

Conversion to a single compliant technology has 

proven challenging for many legacy toll operators given the magnitude of the investment 

required. This can be a challenge within a single 

State as well as throughout a region or across the 

country. When Washington State Department of 

Transportation (WSDOT) implemented tolling 

on all lanes of SR-520, it decided to use variably 

priced, all-electronic tolling. Electronic tolling 

allows drivers to pass through the tolling area at 

highway speeds, and the system either reads 

their “Good to Go!” transponder or their license 

plate. In order to achieve regional interoperability, WSDOT needed to retrofit their technology 

so that all facilities would work similarly. This 

was a very large and costly undertaking.10

10 Patty Rubstello, WSDOT. National Congestion Pricing 

Conference. Seattle, WA, July 9-11, 2013.

The complexity increases when agencies that use 

different technologies attempt to develop a 

regional network. However, these complexities 

can be overcome with an attitude of cooperation 

and strategic thinking. The Florida case study 

highlighted in this chapter gives a good example 

of how the complexities can be overcome. 

Similar interoperability challenges exist with 

parking pricing. There is a national interest in the 

way payment methods affect parking pricing. 

This is important because parking pricing has a 

significant influence on travel behavior. Currently, 

parking pricing has slightly less of an interoperability challenge than tolling because customers 

can still pay with cash. However, agencies are 

under significant pressure to phase out the cash 

payment option due to the amount of labor 

involved with collecting cash from the meters. 

Some agencies are working toward a goal of 

having a single account and transponder to pay 

for both parking and tolls. E-ZPass transponders 

are used for parking in some areas, but it is 

expensive and limited due to a patent on the 

transponders. The E-ZPass Interagency Group 

(IAG) has researched various options of interoperability among tolls, parking, and transit, but a 

universal solution has yet to be found.11 

The SFpark project began moving toward 

interoperable parking pricing throughout the San 

Francisco region by installing new parking 

sensors and meters allowing a credit card 

payment option for both on-street and off-street 

parking. As is the case in many States, cash 

payment still remains an option in San Francisco; 

however, in comparison to citywide trends, the 

installation of credit card-enabled parking meters 

and longer time limits appears to have resulted in 

significant increases in net annual revenues.12 

11 Tom Gugel, MDTA. FHWA Tolling and Pricing Back Office 

Issues Peer Exchange. Hanover, MD, May 6, 2014.

12 SFpark and San Francisco Municipal Transportation Agency, 

SFpark Pilot Project Evaluation Summary, June 2014. Available 

at: http://sfpark.org/wp-content/uploads/2014/06/SFpark_Eval_

Summary_2014.pdf

E-ZPass States agree to one common 

brand and one set of business 

rules, which prevents the States 

from having to make individual 

agreements with each other. 

Source: Tom Gugel, Maryland 

Transportation Authority (MDTA)

Source: Chesapeake Expressway , Rt. 168.

Figure 5. Photo. Toll plaza on Virginia’s 

Chesapeake Expressway.
CONGESTION PRICING A Primer on Back Office Issues | 11

Demand-responsive parking pricing and other active parking management strategies have the potential 

not only to improve utilization of curbside lanes dramatically, but also to serve as a significant 

congestion reduction strategy in concert with other road pricing elements. Interoperability among 

these various road user types will require not only interoperable technology, but also an agreement on 

business rules. There are many different options for how to pursue and achieve interoperability, but 

however it is achieved, it is important to recognize and respect the toll collection infrastructure that 

States already have in place.13

13 Diane Gutierrez-Scaccetti, FDOT. FHWA Tolling and Pricing Back Office Issues Peer Exchange. Hanover, MD, May 6, 2014.
12 | CONGESTION PRICING A Primer on Back Office Issues

 Florida Case Study14 

SunPass is Florida’s pre-paid, transponder-based electronic toll collection system. It is accepted on all 

Florida toll roads and nearly all toll bridges. SunPass customers always pay the lowest toll rates 

available and benefit from an average discount of 25 cents off the cash toll rate on most tolls. SunPass 

was created by Florida’s Turnpike Enterprise, a business unit of the Florida Department of 

Transportation (FDOT). 

Florida has put a great deal of thought and effort into interoperability in the region. Florida, Georgia, 

and North Carolina have entered into a multi-state toll interoperability agreement that allows North 

Carolina’s Quick Pass, Georgia’s Peach Pass, or Florida’s SunPass (as well Florida’s E-Pass and 

LeeWay Pass) customers to use the toll facilities in any of the three States and have those transactions 

billed to their existing pre-paid toll accounts. In-lane systems in Florida and North Carolina can read 

SunPass or Quick Pass transponders. The same is true for Georgia’s in-lane system which reads all of 

the transponders issued by toll agencies in all three states. Florida and North Carolina toll account 

customers using Georgia toll roads are processed in the lane by their transponder; however, Peach 

Pass customers that travel on Florida or North Carolina toll facilities are tolled using a limited 

application of video tolling. For this application, license plate images are captured and compared to the 

Peach Pass account database. If a license plate can be matched with a valid Peach Pass account, the 

toll is applied to that account. Despite the differences in in-lane toll systems, the video tolling 

application was relatively easy to implement since all three States’ in-lane systems already had video 

tolling infrastructure in place. Florida is also in the process of making in-lane system upgrades in 

order to read Georgia’s Peach Pass transponders in their lanes.

Another opportunity that Florida’s Turnpike Enterprise (FTE) is addressing is to provide a regional 

Interoperability Hub (i.e., the “Southeastern States Interoperability Hub”). This allows FTE to provide 

interoperable toll transaction processing for Georgia’s and North Carolina’s transactions (as well as 

those for the other four tolling entities within Florida – Miami-Dade Expressway Authority (MDX), 

Central Florida Expressway Authority (CFX), Tampa-Hillsborough Expressway Authority (THEA), 

and Lee County (Leeway)). North Carolina and Georgia do not have separate agreements with each 

other or the other tolling entities in Florida; instead, they each have an agreement with FTE. Toll 

transactions at each agency are processed by that agency’s back office system, which “bundles” 

together all transactions made with transponders issued by any agency other than their own and sends 

them to FTE’s interoperability hub. FTE receives the out-of-State transactions from Georgia and 

North Carolina along with those occurring in Florida and sends them through to each agency for 

payment according to the agency that issued the transponder used in the transaction. This allows for 

North Carolina, Georgia, and all five Florida tolling agencies to enjoy the benefits of interoperability 

without the need for separate technical interfaces and agreements. It also leverages the investment 

FTE has already made to be interoperable with each State. Collectively, Florida, Georgia, and North 

Carolina are working to connect other southeastern States with toll facilities into the regional hub (i.e., 

Louisiana, Alabama, and South Carolina). They are also in discussions with tolling agencies in Texas 

to explore the possibility of connecting the Texas Interoperability Hub to the Southeastern States 

Interoperability Hub.

Florida’s successes have come from simple networking with neighboring agencies. When developing 

these agreements, it is important to be open-minded and consider a balance of revenue and risk and, of 

course, the benefits to the in-State customers and out-of-State visitors. Florida is building a new back 

office that will be scalable to serve as a regional hub when interoperability exists on a national level. 

Through its experience, Florida has learned that sharing resources and ideas benefits not only 

transportation agencies, but ultimately the customer. 

14 Diane Gutierrez-Scaccetti, FDOT. FHWA Tolling and Pricing Back Office Issues Peer Exchange. Hanover, MD, May 6, 2014.
CONGESTION PRICING A Primer on Back Office Issues | 13

TOPIC AREA 3: Back Office Efficiency

For many of the early operational managed lane 

projects, most commonly implemented as High 

Occupancy Vehicle (HOV) lanes, the primary 

objective of the implementing agency was to 

better manage traffic on existing facilities while 

maintaining travel time advantages for transit 

and HOV travelers. Over time, many HOV lanes 

have been converted to High Occupancy Toll 

(HOT) lanes where a toll was charged for entry 

into the lane, but revenue generation was 

predominantly of secondary concern. Thus, 

there was little focus on the cost of transaction 

processing and back office operations. 

Today’s projects, especially those funded 

through bond proceeds, need to meet very 

stringent net revenue marks, making all costs 

critical and driving the need for the most 

efficient back office operations. Often agencies 

do not specifically address the efficiency of the 

systems in the back office. There has been a 

tendency to overlook the costs associated with 

back office functions since net revenue is what 

provides the money to put back into the system. 

However, Washington State Department of 

Transportation’s (WSDOT) implementation of 

tolling on SR-520 was very focused on accounting 

and how to deal with revenue. The agency found 

that stepping back and looking at managed lane 

projects holistically is a more constructive 

approach than looking at things on a project-byproject basis.16

Priced managed lane systems that are under 

development are facing the challenge of 

16 Ibid.

Key Points

• Consider back office efficiency from the 

beginning of the planning process. 

• Consistency and standardization across 

facilities is important. 

• Cloud computing and smart phone 

applications can provide great benefits to 

tolling systems.

• Contracting with the private sector to 

manage back office operations can both 

make operations more efficient and ease 

State department of transportation (DOT) 

budgeting and accountability 

responsibilities. 

• Deciding how and when to change rates is 

a massive data challenge requiring a 

robust data tool and a very efficient 

back office. 

Back office efficiency should be considered from 

the beginning of the planning process. There is a 

tendency to make back office functions totally 

unique to each facility as opposed to 

standardizing them across facilities. Managed 

lane project implementers have indicated that 

more consistency is better, but starting simple 

can be a good approach. In other words, while it 

may seem desirable to implement business rules 

and processes that cover every possible event that 

could occur, keep in mind that this can make the 

system overly complicated.15 

15 Patty Rubstello, WSDOT. National Congestion Pricing 

Conference. Seattle, WA, July 9-11, 2013.
14 | CONGESTION PRICING A Primer on Back Office Issues

combining back office operations for multiple 

facilities into a single location with common 

systems, pricing models, and business rules. As a 

result, many issues need to be balanced. 

WSDOT tries to leverage the private sector as 

much as possible for budgetary and 

accountability reasons. The agency often has 

difficulty maintaining systems in house due to 

budget constraints, but by using the private 

sector, it can set aside specific funding for the 

contracts. Vendors are required to address any 

issues that arise, such as lost transactions or 

faulty readers, which provides the system with a 

guarantee that would not exist if it were 

maintained in house.17 

In California, two different models are being 

used in different areas – one outsources 

everything while the other does everything in 

house. The efficiency of the back office was very 

important for SFpark. Deciding how and when to 

change rates is a massive data challenge, and the 

efficiency of their back office was also very 

important for the evaluation of such a groundbreaking project. They did not want to give too 

much control to one vendor and wanted the 

flexibility to be able to switch out parking sensor 

and meter vendors.18 Conversely, Los Angeles 

Department of Transportation took a very 

different approach with its Metro ExpressLanes 

17 Patty Rubstello, WSDOT. Federal Highway Administration 

(FHWA) Tolling and Pricing Back Office Issues Peer Exchange. 

Hanover, MD, May 6, 2014.

18 Jay Primus, SFpark. National Congestion Pricing Conference. 

Seattle, WA, July 9-11, 2013.

and turned everything over to the vendor to 

operate. California provides a good example of a 

state using a hybrid of back office models that 

are most effective for them. In some cases, it is 

beneficial to set industry standards, but in others, 

enforcing a certain standard can make operations 

less efficient.19 

Several agencies have leveraged the private 

sector for back office efficiencies through 

innovative communications approaches. For 

example, cloud computing and smart phone 

applications can provide great benefits to these 

systems.20 

19 Samuel Johnson, San Diego Association of Governments. 

FHWA Tolling and Pricing Back Office Issues Peer Exchange. 

Hanover, MD, May 6, 2014.

20 Jack Opiola, D’Artagnan Consulting. National Congestion 

Pricing Conference. Seattle, WA, July 9-11, 2013.

Florida manages its back office functions 

using a small number of agency staff 

and supplements with 

staff augmentation contracts. 

Source: Diane Gutierrez-Scaccetti, Florida 

Department of Transportation (FDOT)

Source: Rollbacktolls.com

Figure 6. Photo. Changeable displays on an overhead 

gantry indicate the cost of using SunPass 

tolled lanes in Florida.
CONGESTION PRICING A Primer on Back Office Issues | 15

 Florida Case Study21 

When making decisions that affect congestion management, revenue generation is not the primary 

focus. As the use of priced managed lanes continues to expand, revenue generation will play a larger 

part in the discussion, but it will continue to be secondary to safety and trip time reliability. The most 

cost-effective method for processing toll transactions is through a single back office. In Florida, the 

SunPass Customer Service Center processes more than 85 percent of toll transactions across the 

State. Even as back office efficiency improves, congestion pricing programs are not inexpensive to 

operate. In addition to the customer service functions that are most visible to the customer, there are 

costs associated with video tolling including image review, identification of the registered owner of 

the vehicle (ROV), invoice mailing, and payment processing. Finally, there is a large development 

staff that continually monitors and upgrades current software applications and develops new 

applications, such as the mobile SunPass App that many customers use on their smart phones. 

Florida manages its back office functions using a small number of agency staff supplemented with 

contracted staff on both the customer service side and the software development side of the business. 

This model has been successful in managing a single process back office (i.e., fixed-price tolling 

using a prepaid transponder -based account), but as different tolling applications are added (i.e., priced 

managed lanes, reversible lanes, image- based tolling), this model may not be the most efficient. 

There is a significant administrative investment in managing these contracts. Streamlining the 

number of contracts will help reduce administrative time spent on the contract administration and 

will provide for greater consistency across task assignments. 

Florida’s Turnpike Enterprise has taken the lead in developing a new, state-of-the-art customer 

service center with its Expressway Authority partners. This new facility will consolidate the 

individual operations of the four agencies and will be operated by a contractor on behalf of the 

agencies. One of the challenges with this model is that requirements need to be well defined up front. 

In an effort to ensure that all agencies’ needs are addressed, staff from Florida’s Turnpike Enterprise, 

Central Florida Expressway Authority (formerly Orlando-Orange County Expressway Authority), 

Miami-Dade Expressway Authority, and Tampa-Hillsborough Expressway Authority met regularly 

over a 9-month period to define the specific requirements to be included in a procurement document. 

More than 10,000 hours invested by more than 50 agency staff members resulted in more than 2,350 

requirements. During the process, there was a significant amount of industry participation in order 

to ensure a clear understanding of the expected outcome.

Separate from that effort, executive leadership from each of the agencies discussed governance 

issues, analyzing how to provide equity in cost allocation and decision making as it impacts the new 

Customer Service Center. From those discussions, a master interoperability agreement will be 

executed among the parties to ensure consistency in overall management of the center once it is 

operational. 

The participants have defined success for this endeavor as being when customers that use any Florida 

Turnpike Enterprise facility are able to meet their tolling needs with one call. 

21 Diane Gutierrez-Scaccetti, Florida Department of Transportation (FDOT). FHWA Tolling and Pricing Back Office Issues Peer Exchange. 

Hanover, MD, May 6, 2014.

CONGESTION PRICING A Primer on Back Office Issues | 17

TOPIC AREA 4: Enforcement

Key Points

• System capabilities should not drive 

policy. Back office and roadway system 

designs must be capable of supporting 

established enforcement policies and 

strategies. 

• The adjudication process for toll 

violations and for customers to dispute 

violations must be perceived as fair, 

consistent, and effective. 

• Parking and priced managed lane 

programs should strive to turn violators 

into customers through public 

information campaigns citing 

effectiveness of enforcement. 

• Multiple payment options can help 

reduce toll violations.

• Enforcement challenges can be 

addressed through certain policy 

changes, although there are trade-offs 

that must be considered.

The Minnesota State Patrol is committed 

to enforcement. They use a combination 

of mobile readers and visual enforcement, 

which has helped significantly lower 

violation rates. 

Source: Ken Buckeye, Minnesota Department of 

Transportation (MnDOT)

A well planned enforcement policy is important 

both to successful operations and to the ability of 

the facility operator to manage demand and 

pricing of the facility. “Enforcement” often has a 

negative connotation, but well-run parking and 

managed lane programs strive to turn violators 

into customers through public information 

campaigns citing the effectiveness of enforcement activities. 

The credibility of an agency depends upon its 

ability to demonstrate to the toll-paying public 

that abusers of the system are being pursued and 

that they will pay significant penalties. In an 

effort to combat its public perception challenges, 

Florida Department of Transportation (FDOT) 

changed its process for egregious violators. 

Individuals with many toll violations are now 

required to appear in court and may have their 

licenses suspended if they do not show up. 

Florida is also implementing a registration hold 

on the violators’ accounts. 

In terms of physical deterrence for violators, 

Florida requires vehicles to have a SunPass 

transponder in order to access any of Florida’s 

toll systems. Limited access points combined 

with physical delineators to prevent lane jumping 

help to keep the violation rate relatively low.22 

Registered high-occupancy vehicles (HOV) with 

three occupants are allowed free access to the 

I-95 Express Lanes utilizing their SunPass. 

While enforcement of HOV has improved 

dramatically, it should be noted that HOV usage 

declined on the facility once HOV registration 

became required. 

22 Diane Gutierrez-Scaccetti, FDOT. Federal Highway 

Administration (FHWA) Tolling and Pricing Back Office Issues 

Peer Exchange. Hanover, MD, May 6, 2014.
18 | CONGESTION PRICING A Primer on Back Office Issues

Previous to the installation of high-occupancy 

toll (HOT) lanes, Minnesota Department of 

Transportation (MnDOT) had very high 

violation rates, between 25 and 45 percent. In 

2005, the I-394 HOT lanes were installed, 

providing a legal option for single-occupancy 

vehicles (SOV) to avoid congestion. Soon after 

the HOT lanes were installed, the police officers 

patrolling the lanes began to use mobile 

occupancy readers. As a result, their enforcement 

program has become much more effective, and 

the violation rates have since been reduced to 

between 5 and 8 percent.23 

Agencies that have implemented priced managed 

lanes have found that the more money that 

people are required to pay the more sensitive 

they are to price changes. In the areas of San 

Francisco where there are typically fewer 

citations, SFpark is achieving its required levels 

and meeting the goals for the pilot. The better 

violations are enforced, the more effectively 

priced parking can be managed. SFpark staff 

have concluded that people typically want to pay 

23 Ken Buckeye, MnDOT. Federal Highway Administration 

(FHWA) Tolling and Pricing Back Office Issues Peer Exchange. 

Hanover, MD, May 6, 2014.

the fee to park, and now that there are more 

options for payment and flexibility with time 

limits, they are more likely to pay.24 

It is important to public perception of the 

program to have a visible, active policy for 

enforcement. Paying customers are very 

concerned with being sure other people are 

paying their tolls. Successful enforcement 

contributes to the credibility of a facility. For 

example, SFpark included enforcement in its 

real-time data pilot and was able to show which 

spots are occupied but not paid for in real-time, 

making enforcement much easier. And, although 

Los Angeles Metro predicted reduced violations 

when converting its HOV lanes to HOT express 

lanes, the agency also added dedicated photo 

enforcement. 

Enforcement is a very critical factor before and 

after converting to any new congestion pricing 

strategy, and it is essential that the back office be 

capable of supporting the necessary enforcement. 

 

24 Alex Demisch, SFpark. FHWA Tolling and Pricing Back Office 

Issues Peer Exchange. Hanover, MD, May 6, 2014.

Source: WUSA 9

Figure 7. Photo. Video and transponder detection devices mounted on an overhead gantry.
CONGESTION PRICING A Primer on Back Office Issues | 19

 San Diego Case Study25 

The I-15 Express Lanes facility in San Diego is a 20-mile-long, high-occupancy toll facility between 

SR-163 and SR-78. Originally an 8-mile segment opened in 1997, the current, expanded configuration 

was completed in January 2012. The I-15 Express Lanes feature four lanes with a moveable barrier for 

maximum flexibility, multiple access points to and from the general purpose highway lanes, and direct 

access ramps for high-frequency bus rapid transit service. The Express Lanes provide vanpools, 

carpools, buses, and FasTrak® customers a faster and more reliable trip along the booming corridor 

while relieving demand on the general purpose lanes.

One enforcement challenge is that there is currently no commercially viable automated solution that 

can accurately identify how many people are in a vehicle.26 Switchable transponders provide a selfdeclaration mechanism, but do not necessarily enhance an agency’s ability to identify and pursue 

cheaters. Various agencies are exploring policy changes that can be made to support enforcement 

needs, such as requiring all vehicles to have a registered transponder and all carpools to have a 

separate registration. These policies reduce violations by increasing the effort necessary to cheat the 

system but are still tied to the honor system and require manual observation to identify violators.

It is estimated that the I-15 Express Lanes have a range of 10 to 20 percent for violation rates. This is 

common for HOT and HOV facilities due to the attractive mobility benefit they provide combined 

with the low likelihood of being caught. Recent expansions and improved access to the I-15 Express 

Lanes have introduced new challenges for manual enforcement. Vehicles can now enter and exit the 

facility every couple of miles, which makes positioning enforcement difficult and results in location 

enforcement versus facility enforcement. Additionally, the broad definition for vehicle occupancy 

(which is used by most of the country that includes children not of driving age) makes manual 

enforcement challenging. Officers are hesitant to stop perceived violators based on visual observation 

because of the risk of stopping vehicles with small children in the back seat that were not clearly 

visible from outside the vehicle. While this means officers focus on more important traffic safety 

areas, it deters an agency’s efforts towards a well-planned enforcement policy and does not provide for 

cost recovery. Like many agencies, the San Diego Association of Governments (SANDAG) pays the 

California Highway Patrol directly to patrol the facility and perform toll enforcement activities. 

However, due to the low number of citations issued, the actual fees and penalties from toll violations 

are significantly lower than the cost of enforcement. 

25 Samuel Johnson, San Diego Association of Governments. FHWA Tolling and Pricing Back Office Issues Peer Exchange. Hanover, MD, 

May 6, 2014.

26 Technology research and testing are currently being conducted.

CONGESTION PRICING A Primer on Back Office Issues | 21

TOPIC AREA 5: Data Analysis 

and Warehousing

Key Points

• Operating agencies must identify the 

purpose, needs, and requirements of the 

system and design for proper data 

architecture and warehousing at the 

beginning of the process. 

• Charging the correct market-driven toll or 

parking rate is critical to optimizing limited 

capacity. 

• To develop a good set of data privacy rules 

for a project, look at the data being collected 

and determine what will be done with it and 

for how long it is needed. 

• Agencies must focus on communication, 

outreach, safety, and education of the public 

from the beginning. 

The process of setting rates on transportation 

facilities to help manage demand against supply 

requires a massive data analysis process. Tolling 

systems have to be strong in this area because 

they have to capture every transaction and assess 

revenues. Designs for data architecture and 

warehousing should be easily expandable to 

adjust to the ultimate data analysis requirements. 

The purpose, need, and requirements of data 

systems must be identified in the planning phase, 

as business rules are being developed. Charging 

the correct market-driven toll or parking rate is 

critical to optimizing the use of limited capacity. 

However, changing rates or rate structures can 

sometimes be a large effort, so actions that will 

streamline such efforts will assist with the back 

office challenge. For example, SFpark 

acknowledged that rates needed to be changed 

by time of day and day of week, but to make the 

process as simple as possible, the agency used 

blocks of time rather than making hourly 

changes. Also, they use the same rate structure 

for about two months, because there is a lot of 

back and forth that has to happen with the 

vendors each time they want to change them. 

Communicating changing prices with the public 

is also a big challenge. This is an area where 

parking pricing greatly differs from managed 

lanes, because there is not a large sign showing 

drivers what the current rates are, as managed 

lanes typically have. SFpark publishes 

everything on their website, mobile applications, 

and many other places, and still people tend not 

to know what the rate is going to be until they 

get to the meter. Informing the customer in a 

timely manner involves analysis of real-time 

data, as well as usage trends before publishing 

the rates, thus requiring the back office to be 

extremely efficient.27

When Washington State Department of 

Transportation (WSDOT) installed its first 

high-occupancy toll (HOT) lane project, traffic 

information was already being pushed out from 

the traffic management center (TMC) in realtime. Prices were not initially pushed out in 

real-time because they do not really have an 

effect on travelers unless they are already in the 

lane. However, with the addition of tolling on 

SR-520, a number of mobile applications have 

27 Alex Demisch, SFpark. Federal Highway Administration 

(FHWA) Tolling and Pricing Back Office Issues Peer Exchange. 

Hanover, MD, May 6, 2014.
22 | CONGESTION PRICING A Primer on Back Office Issues

been developed to send users real-time pricing 

information. WSDOT is working to start 

pushing out prices to give the application 

developers additional information to assist the 

traveling public in making travel decisions.28

San Diego Association of Governments 

(SANDAG) is also working to do this with 

their mobile application, but they are 

concerned that there could be issues resulting 

in a negative impression on the system if for 

some reason the mobile application has a 

different number than the bill does.29 

Data privacy (addressed in Topic Area 7), 

which can be regulated by State and local 

laws, directly impacts the data analysis process 

for toll and rate transactions and, in turn, the 

architecture required. Many States do not have 

specific privacy laws regarding data analysis 

written into their constitution. In order to 

develop a good set of data privacy rules for a 

project, it is essential to look at the data that is 

being collected and determine what will be 

done with it and for how long it is needed. 30 

Different agencies keep data for 

varying lengths of time. The 

challenge is to strike a balance 

between privacy advocates 

wanting data to be kept for the 

shortest amount of time 

possible and the necessity of 

keeping transaction and 

vehicle data linked long enough 

to deal with contested transactions 

and the full adjudication process. San 

Francisco Municipal Transit Authority 

(SFMTA) is currently keeping all of 

SFpark’s data as there will be a great deal 

28 Patty Rubstello, WSDOT. FHWA Tolling and Pricing Back 

Office Issues Peer Exchange. Hanover, MD, May 6, 2014.

29 Samuel Johnson, SANDAG. FHWA Tolling and Pricing Back 

Office Issues Peer Exchange. Hanover, MD, May 6, 2014.

30 Jack Opiola, D’Artagnan Consulting. National Congestion 

Pricing Conference. Seattle, WA, July 9-11, 2013.

of analysis performed on this pilot project. The 

agency is also requiring all of its vendors to keep 

all of the data for 5 years past the terms of their 

contract.31 In San Diego, legislation says that 4 

years after an account is closed, an agency must 

remove all personally identifiable information. 

31 Alex Demisch, SFpark. FHWA Tolling and Pricing Back Office 

Issues Peer Exchange. Hanover, MD, May 6, 2014.

The SFpark project collected an 

unprecedented data set (including 

transit, traffic, and sales tax data) to 

enable a thorough evaluation of its 

effectiveness. This necessitated a 

well-defined and highly structured 

data management system. 

Source: Jay Primus, SFpark

Figure 8. Photo. An SFPark parking meter.

Figure 9. Map. An SFPark operational area and information 

on rates by time period.

Source: SFPark
CONGESTION PRICING A Primer on Back Office Issues | 23

SANDAG tries to keep any records that may be needed to serve their customers, as they have had 

people call years later asking for a list of transactions for tax filing, but all photo supportive 

information is written over after 30 days.32 

It is easy to underestimate the amount of data an agency will acquire throughout a large congestion 

pricing project. Defining the requirements up front to the greatest degree possible helps inform the 

structuring and data warehousing effort that will be needed. Understanding the data and filtering 

through it to see what does and does not make sense will be a necessary part of the process. Agencies 

should keep in mind that there is always some judgment involved. 33 

32 Samuel Johnson, SANDAG. FHWA Tolling and Pricing Back Office Issues Peer Exchange. Hanover, MD, May 6, 2014.

33 Alex Demisch, SFpark. FHWA Tolling and Pricing Back Office Issues Peer Exchange. Hanover, MD, May 6, 2014.
24 | CONGESTION PRICING A Primer on Back Office Issues

 SFpark Case Study34

The SFpark pilot project was a federally funded demonstration of a new approach to managing 

parking. It used better information, including real-time data to inform drivers where parking is 

available and demand-responsive parking pricing to help make parking easier to find. The SFpark 

pilot relied on real-time data, from new technologies such as in-ground parking sensors and smart 

parking meters. The SFpark project also collected a comprehensive data set (including transit, 

traffic, and sales tax data) to enable a thorough evaluation of its effectiveness.

Due to the extremely large amount of data that was collected throughout this project, the design 

for the data warehousing and analysis elements was critical to the effectiveness of the back office 

operations. The SFpark data management system enabled the implementation, operation, and 

evaluation of the pilot. The most important step in performing these functions was developing a 

data warehouse that could manage and process the high volume of data to support the analyses 

required for the pilot. The data needed to be stored in a very structured way because this data 

collection effort is probably the first of its kind and is likely to be used to assist with similar 

programs in the future. 

Defining the purpose and specific needs of a system up front is critical to implementing a 

successful data management system. The SFpark system was designed to receive data from 

multiple vendor systems and process that data to provide real-time parking availability to the 

public, analysis of historical parking occupancy data for demand-responsive rate adjustments, 

asset management, and the combination of disparate data sources to evaluate the program. An 

unanticipated need was also to clean datasets and measure vendor performance. For instance, the 

SFpark analytical tools were able to identify and predict outages in the parking sensor vendor’s 

system. A number of operational reports were also required to reconcile multiple data systems 

and find a “single source of truth” to ensure proper implementation of demand-responsive 

pricing.

During the project’s early planning phases, the San Francisco Metropolitan Transit Authority 

(SFMTA) chose to build the SFpark data management system and provide many of the required 

functions using its own staff. Different approaches could have been used, including contracting 

out various portions of the data management effort and using open source tools. These 

approaches may have provided advantages, but SFMTA was concerned that it would have less 

flexibility in how data could be analyzed, particularly when combining multiple data sources, 

such as parking sensors, meters, and enforcement data. SFMTA’s in-house approach resulted in 

considerable flexibility in processing and analyzing data and enhanced product support. SFMTA 

learned through this process that, regardless of its approach (i.e., in-house or open source), the key 

functions and requirements should be clearly defined up front.

34 Alex Demisch, SFpark. FHWA Tolling and Pricing Back Office Issues Peer Exchange. Hanover, MD, May 6, 2014. And Jay Primus, 

SFpark. National Congestion Pricing Conference. Seattle, WA, July 9-11, 2013.
CONGESTION PRICING A Primer on Back Office Issues | 25

TOPIC AREA 6: Transparency

Public support for priced managed lanes, tolling, 

and other market-based transportation strategies 

is highly dependent upon an understanding of 

policy and operations, with the result being 

public trust in the agency. 

Public agencies such as State departments of 

transportation (DOT) are often held to a different 

standard regarding disclosure than private 

operators or even legacy tolling agencies. They 

must be more transparent and open in their 

process as the public is accustomed to State 

DOTs providing highways for “free.” Agencies 

that propose to repurpose roadway lanes for 

more efficient use of existing infrastructure (e.g., 

high-occupancy vehicle (HOV) to highoccupancy toll (HOT) conversion), have the 

burden of demonstrating that tolls are necessary 

to maintain travel time advantage for priority users 

(transit, HOV) and to repay costs. Transparency is 

critical to proving the need to toll. For projects and 

systems where new lanes or other major facilities 

are provided through tolls and user fee funding, 

the linkage between high initial costs and revenue 

sources can be more apparent. 

One of the key policy considerations is sources 

and uses of funds. Agencies are now recognizing 

that managed lane facilities and public parking 

are “consumer products” and that customers 

need to understand where their money is going. 

They have questions such as: 

• Which agencies and funding sources are 

used to develop facilities? 

• How much of that funding must be “paid 

back” out of toll or user fee revenues? 

Key Points

• Public support of priced managed lanes 

requires trust in the agency and an 

understanding of policy and operations.

• Transparency is critical to building a case 

for toll lanes to the public. 

• Agencies must be willing to release 

transaction data, revenue, and traffic 

information in order to change the public 

misperception that managed lanes are a 

“cash cow.” 

• Agencies need to find a balance between 

providing adequate explanations of back 

office operations and providing too much 

information. 

• Releasing back office data to demonstrate 

actual travel time improvements can help 

communicate project objectives and 

anticipated outcomes.

In early stages, SFpark stated they 

would raise and lower parking meter 

rates based on supply and demand. 

This aided in earning public trust when 

meter rates were actually lowered. 

Source: Alex Demisch, SFpark
26 | CONGESTION PRICING A Primer on Back Office Issues

• What elements are considered “costs” that 

must be repaid? 

For example, several HOT lane conversion 

projects operate on infrastructure that was funded 

in part through Urban Mass Transit Administration (UMTA) (currently Federal Transit 

Administration (FTA)) funding. Transit agencies 

and advocates expect a return on that major 

investment since those were built originally as 

HOV/bus lanes. There is a wide variance in 

responding to these questions about projects and 

systems nationally as performance of the implemented strategy will vary by locality. While 

specific national “guidance” would be inappropriate 

on these questions, the lesson learned here is that 

these decisions must be revealed and consistently 

supported by operational strategies. 

There has been a public misperception common 

to many of the operating HOT lane conversion 

projects (including MnPASS) that these lanes are 

a “cash cow” for the operating agency, even 

though the reality is that the lanes generate only 

a modest amount of revenue by most tolling 

standards.35 In addition, because vendor 

operations agreements, enforcement cost, 

equipment purchases, revenue allocation 

requirements, and revenue sharing agreements 

are unique to each corridor, there is a rather 

complex accounting and reconciliation process. 

The complexity of this accounting trail is 

formidable, further complicating agencies’ 

efforts to be open and transparent. 

35 Ken Buckeye, FHWA Tolling and Pricing Back Office Issues 

Peer Exchange. Hanover, MD, May 6, 2014.

Transparency is also essential for demonstrating 

traffic operations advantages and effective 

enforcement (see Topic Area 4: Enforcement) on 

the facility. Many agencies have identified 

“improving traffic flow” or “more efficient use of 

existing infrastructure” as a top objective for 

variable pricing of facilities. While the positive 

effects on traffic can be substantial where new 

lanes are added or major operational changes are 

made, impacts may be less apparent and more 

difficult to demonstrate on certain projects. In 

particular, several HOV to HOT lane conversion 

projects have experienced small but measurable 

improvements in traffic flow. However, they 

have had difficulty in clearly communicating to 

the public that the congestion levels have actually 

improved in the general purpose lanes as a result 

of some drivers leaving that traffic stream and 

opting to pay a toll for the premium HOT 

service. It is incumbent upon the agency to share 

these impacts with the public in order to show 

how they have performed in achieving their 

stated objectives. As an example, SFpark stated 

in the development phase of their variable 

parking pricing program that they would raise 

and lower parking meter rates, as supply and 

demand dictated. While the public may have 

been skeptical initially, the agency earned the 

trust of the public when they actually lowered 

meter rates on lower demand blocks or at certain 

times of day. This was made possible because 

SFpark transparently and clearly publicized these 

actions.36

36 Alex Demisch, SFpark. FHWA Tolling and Pricing Back Office 

Issues Peer Exchange. Hanover, MD, May 6, 2014.

Creating and communicating an 

understandable message without 

getting too far into the weeds is the best 

way to be transparent. 

Source: Ken Buckeye, MnDOT

Source: Carol Zimmerman

Figure 10. Photo. An express bus travelling in tolled lanes 

on a Florida highway.
CONGESTION PRICING A Primer on Back Office Issues | 27Source: VDOT

Despite agencies’ efforts to communicate their 

processes, transparency can boil down to the issue 

of user understanding. San Diego Association of 

Government’s (SANDAG) experience on the I-15 

Express Lanes has shown that carpoolers 

understand that they may use the facility, but people 

with tolling accounts and transponders from 

various facilities in the region have not fully 

understood that they are eligible. Minnesota 

Department of Transportation (MnDOT) has 

found that there is confusion about when MnPass 

holders (tolled) and free users (buses, carpools, and 

motorcycles) can use the facility and when they 

cannot. Even though the signage, website, and literature all state that the lanes are available to all, 

using managed lane facilities in off-peak hours is not something that many drivers seem comfortable 

with. WSDOT observed that many carpoolers did not realize that they were still eligible for free use 

following the conversion of SR 167 from HOV to HOT lanes, despite clear signage to that effect. 

Transparency at the policy level is very important to ensuring public understanding of how and why 

the agency came to certain conclusions in developing the facility. However, operationally, it is very 

difficult to be fully transparent without raising unnecessary questions and confusing the public. 

Providing too much information can lead to evaluation of fine details, such as exact amount and 

timing of toll rate changes. This can lead to some uncertainty in the overall process and mask broader 

successes in meeting project objectives. 

Figure 11. Illustration. A dynamic traveler information 

sign indicates the amount of time it will take to reach a 

destination via high-occupancy vehicle lanes versus 

normal travel lanes.
28 | CONGESTION PRICING A Primer on Back Office Issues

 Minnesota Case Study37

The Minnesota Department of Transportation (MnDOT) currently has two operational MnPASS 

Express Toll Lane facilities in the Minneapolis/St. Paul region: I-394 MnPASS, which is 11 miles in 

length, and I-35W, which is 18 miles in length. In the fall of 2015, the I-35E MnPASS express toll lanes 

will open in the east metro area as MnDOT’s first new HOT capacity (4 miles with a possible 6-mile 

extension) on an interstate. Additionally, there are six other express toll lane projects in various stages 

of planning and design, including I-35W north; I-94; I-494; and State Highways 169, 77, and 36. 

From nearly 10 years of operational experience, MnDOT has learned many valuable lessons with 

regard to the transparency of information that is shared with the public, press, and other stakeholders. 

Transparency is an important, essential, and yet challenging operating philosophy that manifests itself 

in a number of ways. Challenges include communicating project purpose, customer and public 

understanding of the price setting policy, and sources and uses of revenue.

Communicating Project Purpose - The I-394 MnPASS Express Lane (opened in May 2005) was 

designed to improve the efficiency of I-394 by increasing the person- and vehicle-carrying capabilities 

of existing high-occupancy vehicle (HOV) lanes, maintaining free flow speeds for transit and 

carpools, and using electronic toll collection—tags/transponders and readers—for dynamic pricing 

and electronic enforcement. The transparency challenge was to develop a clear public understanding 

of the operations policy; that is, to explain why a “toll lane” is better than a free lane. Opening the lane 

to HOT operations was not intuitively the best solution to the public. An important component of this 

conversion, however, was the understanding that converting an HOV lane to general purpose use 

would require a significant pay-back of the Federal funds used originally to develop the facility, and 

that converting the lane to a general purpose lane would mean the loss of a reliable congestion-free 

trip for transit and carpools.

The notion of equity in the HOT lane policy was also paramount and, to some degree, crosses over 

into the notion of privacy. The State does not collect income information from MnPASS subscribers 

and, therefore, is unable to determine the income profile of the MnPASS users. In the larger picture, a 

legitimate question is “Does it matter?” After all, the lane is still open and free to transit and 

carpoolers as well as motorcyclists. No privileges have been taken away, and in fact, even the drivers 

who remain in the general purpose lanes experience a better and safer trip. In the spirit of 

transparency, however, this explanation, while true, may seem rather dismissive. 

Customer and Public Understanding of the Price Setting Policy - Communicating the toll rate 

setting process clearly for MnPASS customers and the public is challenging given the complexity of 

the algorithm controlling the price. For the most part, MnPASS users buy into the HOT lanes with 

incomplete knowledge as to what time saving they receive for their toll dollar. However, estimates of 

transit travel times in the MnPASS lanes are posted as compared to travel times with the general 

purpose lanes at the southern end of the I-35W corridor. In the spirit of clarity and transparency, the 

MnPASS website and printed information state that: “As the express lanes become more congested, 

the fee to enter the lanes increases... increasing the speed of the vehicles already in the lane. If express 

lanes aren’t tolled in this fashion, the lanes would not be an express option for motorists.” Despite the 

clarity with which MnDOT attempts to communicate how the variable pricing is adjusted by volumes 

and speeds in the MnPASS lanes, many customers believe that the prices are set by the congestion 

occurring in the adjacent general purpose lanes. 

37 Ken Buckeye, MnDOT. FHWA Tolling and Pricing Back Office Issues Peer Exchange. Hanover, MD, May 6, 2014.
CONGESTION PRICING A Primer on Back Office Issues | 29

 Minnesota Case Study (continued)

Source: Newsline. MnDOT

MnPASS’ dynamic tolling algorithm has been adjusted three times on the MnPASS lanes over the last 

9 years to help the lanes approach optimal performance levels. MnDOT does not publicly announce 

an algorithm adjustment because it would cause unnecessary concern, confusion, and perhaps even 

suspicion. Prices are not set to maximize revenue, so the purpose of an algorithm change is to improve 

system performance. While this is a logical and defensible communications strategy and message, 

MnDOT acknowledges that this is not a completely transparent policy, but rather the result of 

pragmatism. An irony of the MnPASS pricing system is that people generally do not know how it 

works. They are very supportive of MnPASS despite not knowing the details of the pricing process 

because they typically experience a better commuting trip. 

Sources and Uses of Revenue - By law, the sources of funding and the uses of revenue are unique to 

each MnPASS corridor. On I-394, MnDOT is required to pay back capital costs for developing the 

facility. Revenue beyond the cost of operations is then split between transit and enhancements on the 

facility itself. On I-35W, authorizing legislation does not require capital cost repayment but requires 

immediate sharing of “excess revenue” beyond operations expenses. It is critical for MnDOT to be 

transparent in accounting for these costs and revenues in order to maintain public trust that funds are 

distributed equitably. In the MnPASS system, tolls and user fees do not flow through the customer 

service vendor accounts, but rather to a State-administered account system, which is reassuring to 

the public.

Transparency is to some degree illusory. While MnDOT has no intention of hiding important 

information or data, providing too much information risks obscuring the question and is likely to raise 

additional questions and confusion, which in turn can cause distrust. Therefore, it is essential that, in 

its attempt to be as transparent as possible, MnDOT be aware of the careful balance that is needed in 

creating and communicating an understandable message without getting so far into the details as to 

create additional confusion and perhaps distrust.

Figure 12. Photo. A sign on a gantry shows rates for using a 

high-occupancy toll lane to reach different destinations.

CONGESTION PRICING A Primer on Back Office Issues | 31

TOPIC AREA 7: Privacy

Key Points

• Widespread acceptance of the 

technology that makes much of our 

private information publicly available 

(smart phones, iPads, GPS) seems to 

have moderated drivers’ concerns 

about privacy.

• The public must be able to trust that the data 

collected to apply proper tolls and to support 

effective enforcement is only used for its 

stated purposes.

• Transaction data should be separated from the 

vehicle by aggregating data and eliminating 

individual trips. It is important to delete 

“violation supportive” data, such as photos, 

once a successful transaction is complete. 

• Agencies must develop their back office business 

rules in coordination with State data privacy 

regulations. 

• A written policy that explicitly describes what 

can and cannot be shared should be publicly 

available for reporters and others requesting data 

and information. 

Privacy of data related to customer accounts has 

been an issue of concern since the early days of 

electronic tolling two decades ago. Today’s 

all-electronic tolling (no option for cash payment) 

has heightened this concern among privacy 

advocates. At the same time, the acceptance of 

the technologies in our everyday lives (smart 

phones, iPads, and Global Positioning System 

(GPS)) that makes much of our private 

information publicly available seems to have 

moderated drivers’ concerns about the 

government tracking their movements.

There is a delicate balance between a transparent 

back office process and data privacy. As outlined 

in the previous section, tolling operators want to 

be as transparent in their operations as practical 

in order to gain credibility and trust with the 

public. However, they must draw the line when it 

comes to information contained in customer 

accounts. There is significant value in sharing the 

detailed movements of vehicles on the roadway 

and tollway network for traffic analysis and 

research purposes. The public must be able to 

trust that the data that is collected to apply proper 

tolls and effectively enforce use of the facility is 

only used for that purpose. In an effort to 

reassure the public, agencies have applied various 

methods to separate transaction data from the 

vehicle by aggregating data and eliminating 

individual trips. Other agencies have retained 

transaction data but deleted “violation 

supportive” data, such as photos, once a 

successful transaction is complete. 

Source: Carol Zimmermann

Figure 13. Photo. Entrance to the SunPass Express 

Toll Lanes on I-95.
32 | CONGESTION PRICING A Primer on Back Office Issues

Many States have existing statutes pertaining to 

data privacy and must develop their tolling 

business rules consistent with those statutes. For 

example, Florida Department of Transportation 

(FDOT) acknowledges that privacy issues are 

driven solely by the legislature.38 Likewise, 

Washington has very strict statutes designed to 

maintain user privacy, and vendors are required to 

adhere to the same data privacy standards as are 

imposed on banking institutions.39 In some States, 

there are no specific privacy laws written into the 

constitution. Customer privacy protections, which 

are provided in laws, can be explicitly written into 

the customer service agreement (see Minnesota 

case study) along with the limited permitted uses 

of that data. A written policy that explicitly 

describes what an agency can and cannot share 

should be available for reporters and others 

requesting data and information in order to allay 

concerns of bias or preference in information 

requests. It is the practice of some operating 

agencies to release data only when specifically 

required to by court order or subpoena. 

38 Diane Gutierrez-Scaccetti, FDOT. Federal Highway 

Administration (FHWA) Tolling and Pricing Back Office Issues 

Peer Exchange. Hanover, MD, May 6, 2014.

39 Patty Rubstello, WSDOT. FHWA Tolling and Pricing Back 

Office Issues Peer Exchange. Hanover, MD, May 6, 2014.

Business rules vary greatly with regard to 

deleting data from customer accounts over time. 

Some States have legislation requiring the 

agency to retain transaction data for up to 

4 years. The length of time required for the 

adjudication process for toll enforcement and 

contested tolls often drives the period of time 

that individual transaction data is retained. For 

example, in Virginia, if the agency is successful 

in collecting the toll, it has 30 days to keep the 

related transaction information. If the issue is in 

adjudication, however, the agency can keep the 

information until the dispute is settled.40

40 David Caudill, Virginia Department of Transportation (VDOT). 

FHWA Tolling and Pricing Back Office Issues Peer Exchange. 

Hanover, MD, May 6, 2014.

In their customer service agreement, 

MnDOT explicitly states legal customer 

privacy protections as well as the limited 

permitted uses of that data. 

Source: Ken Buckeye, Minnesota Department 

of Transportation (MnDOT)

Source: Washington Post

Figure 14. Photo. Video and transponder detection devices mounted on an overhead gantry on the 

I-495 Express Lanes in Virginia.
CONGESTION PRICING A Primer on Back Office Issues | 33

 Minnesota Case Study41

For Minnesota’s MnPASS Express Toll Lane system, a wide range of customer privacy protections is 

provided in law and in the customer service agreement. This case study addresses issues surrounding 

customer privacy, including personal information, statutes, separating transaction data from the 

vehicle, and transaction data deletion. Generally speaking, through 9 years of operations of 

MnPass, no problems have arisen with the issue of sharing data because rules are stringently followed 

regarding the data privacy guidelines provided in the customer agreement.

Personal information - The secure business management system is completely integrated in the 

MnPASS system and is used to manage toll revenue accounting, customer accounts and 

communications, MnPASS transponder inventory, and reporting requirements. Although no personal 

information is shared, Minnesota Department of Transportation (MnDOT) does require customers to 

provide this data on the application form in order to process the request for a transponder. MnDOT 

and the customer service contractor (CSC) use the data to set up a financial account whereby the 

transaction using a MnPASS transponder is automatically recorded to a specific transponder. The 

financial transaction is entered into a State of Minnesota revenue fund. MnDOT or its CSC may use 

the data provided for these specific purposes: 

• Enforcement of invalid accounts. 

• Market research and customer service purposes related to this program.

• Preparing summary financial reports and analyses that do not identify specific customers.

• Conducting traffic research and customer analyses. 

• Evaluating the MnPASS system. 

• Note that MnDOT and its CSC do not market the data that customers provide.

Statutes regarding privacy of data - The MnPASS Customer Agreement is governed by the laws of 

the State of Minnesota (Government Data Practices Act). All MnPASS customers agree to abide by 

the data privacy practices and procedures by which the MnPASS team stringently abides. This statute 

applies to all data provided by the State under the customer contract, including all data created, 

collected, received, stored, used, maintained, or disseminated by the CSC. When a request for data is 

received, MnDOT provides the CSC with instructions concerning the release of the data to the 

requesting party.

The contract that customers sign makes it clear that they are not legally required to provide the data, 

but if they do not supply the data, MnDOT is not able to process the application. The contract clearly 

states that the data can be released only for specific uses and circumstances, including State and 

Federal audit, court order, new Federal or State legislation, and customer request for their own account 

data. It also states that law enforcement agencies have use of transponder readers that will identify 

only whether the transponder in a particular vehicle is valid. Neither MnDOT nor the CSC will release 

the data provided by the customer to anyone else, or for a purpose not listed, unless given permission 

by the customer via a signed consent form provided by MnDOT. 

41 Ken Buckeye, MnDOT. FHWA Tolling and Pricing Back Office Issues Peer Exchange. Hanover, MD, May 6, 2014.
34 | CONGESTION PRICING A Primer on Back Office Issues

Separating transaction data from the vehicle - The MnPASS CSC generates many reports that 

contain information on MnPASS transactions and revenue. There are currently no laws in 

Minnesota that require separation of transaction data from the vehicle data. However, as a matter 

of policy, all of the transaction and revenue data are separated from the vehicles when vehicles 

are mentioned in a report. It is expected that future legislation will likely contain a separation of 

data provision. Additionally, customers are assured that no photo enforcement data is ever 

collected, as the concept of photo enforcement has been tested and ruled illegal in Minnesota 

based on the premise that citations must be given to individuals, not to vehicles.

Transaction data deletion - With MnPASS, credit card transactions are kept for a period of 7 

years by the CSC. However, all other data is kept indefinitely.

 Minnesota Case Study (continued)
CONGESTION PRICING A Primer on Back Office Issues | 35

TOPIC AREA 8: Private Sector Involvement

Key Points

• Transportation agencies are increasingly 

using public-private partnerships for priced 

managed lane projects in which the private 

partner typically provides the funding up 

front and performs design, construction, 

operations, and maintenance in exchange 

for the right to the tolling revenue for a 

period of several decades.

• The private sector has more flexibility to 

employ technologies they deem most cost 

effective with fewer constraints on 

procurement. 

• Cost sharing agreements across all public 

tolling facilities can be used to distribute 

the costs of back office operations 

equitably.

• Some public agency tolling operators have 

succeeded in opening their tolling and back 

office systems to competition and have 

moved away from proprietary processes 

and technologies.

For many years, traditional public funding 

sources for transportation improvements have 

been insufficient to keep up with growing traffic 

demands. Transportation agencies have 

increasingly found that teaming with the private 

sector can successfully deliver projects as much 

as decades earlier than projected in their longrange transportation plans. There are varying 

degrees of public-private partnership (P3) 

arrangements, but in the majority of priced 

managed lane projects, the private partner 

provides the funding up front and performs 

design and construction in exchange for the right 

to tolling revenue for a period of several decades. 

In many cases, the private entity is responsible 

for all maintenance and customer service—

called an “end-to-end” operations agreement. 

Some public agency toll operators have policies 

or procurement agreements in place that limit 

their options regarding conversion to 

interoperable technology and back office 

systems. The private sector often has the 

flexibility to employ the technology that they 

deem most cost effective without such 

constraints. Regions that are deploying priced 

managed lane networks with multiple toll 

operators involved are implementing costsharing agreements across all public facilities in 

order to equitably distribute the shared costs of 

back office operations.

Washington State Department of 

Transportation (WSDOT) holds 

vendors contractually accountable for 

providing specific funding amounts 

for maintenance and operations. The 

agency found that when these functions 

were performed by agency staff, they 

were typically subject to budget cuts 

within the agency. 

Source: Patty Rubstello, WSDOT
36 | CONGESTION PRICING A Primer on Back Office Issues

WSDOT has teamed with the private sector as 

much as possible, particularly for maintenance 

and operations activities on the State’s tolling 

facilities. The agency found that it is 

advantageous to have the private sector take on 

the roadway system maintenance because 

contracts for private firms are not subject to 

agency budget cuts that can affect operations. 

Additionally, WSDOT can hold vendors 

accountable for continuous service of the 

equipment for which they are contracted. This is 

not the case when in-house resources are used. 

The private sector has already factored in the 

risk of equipment failure into their proposal.42

Minnesota has also succeeded in engaging the 

private sector and implementing P3s. The 

Minnesota Department of Transportation 

(MnDOT) issued a request for proposals (RFP) 

to the private sector when they entered the 

design phase of the I-394 MnPass project, 

inviting firms to submit proposals describing 

how they would design and operate the facility. 

The private sector provided good input, pricing 

the lanes as low as possible so that as many 

42 Patty Rubstello, WSDOT. Federal Highway Administration 

(FHWA) Tolling and Pricing Back Office Issues Peer Exchange. 

Hanover, MD, May 6, 2014.

people as possible could use it at the lowest price. 

The agency also received a response offering to 

help design and manage the facility at a discount, 

which leveraged limited resources. As part of the 

eventual agreement with that offeror, they signed 

an additional agreement to carry on the 

operations. That worked well for the contractor 

because it gave that firm the advantage when 

MnDOT began planning the next facility. The 

back office operator collects money for the State 

of Minnesota, but no money goes through the 

contractor’s account‒all checks are written to the 

State of Minnesota. This has proven important 

because it shows the public that the operator does 

not actually control any State funds.43

43 Ken Buckeye, MnDOT. FHWA Tolling and Pricing Back Office 

Issues Peer Exchange. Hanover, MD, May 6, 2014.

MnDOT issued a request for proposal on 

the I-394 MnPass project for proposals 

describing how they would design and operate 

the facility. The Contractor designed and 

managed the facility at a discount, which 

leveraged MnDOT’s limited resources. 

Source: Ken Buckeye, MnDOT

Source: Virginia DOT

Figure 15. Photo. A dynamic sign mounted on a gantry depicts the cost to travel to different destinations using the 

I-495 Express Lanes.
CONGESTION PRICING A Primer on Back Office Issues | 37

Managed lane and tolling industry experts report that there is great potential for many more successful 

P3 projects in the future to meet the growing transportation system demands. Lessons learned from 

current projects, both operating and in development stages, provide valuable information on how best 

to capitalize on the opportunity. Some public agency tolling operators could benefit greatly by opening 

their tolling and back office systems to competition and moving away from proprietary processes and 

technologies that lock them into sole-sourcing. In addition, smart phone technology is poised to 

revolutionize communications and data transfer for pricing systems if the competition is allowed to 

harness private sector innovation.

 Virginia Case Study44 

The Virginia Department of Transportation (VDOT) and Transurban, a private firm that designs and 

manages toll networks in the United States and Australia, teamed to create a public private partnership 

(P3) to design, build, operate, and maintain priced managed lane facilities on two major roadways in 

northern Virginia.

The original VDOT plans for a traditional expansion of the Capital Beltway were rejected by the 

region because they were cost prohibitive and would have had major impacts on the surrounding 

community and environment. In 2002, the private sector proposed an express lanes alternative, which 

VDOT ultimately accepted. It expanded transit in the region and was built largely within the existing 

footprint of the corridor. The streamlined express lanes required far less space and reduced the 

number of homes that needed to be acquired and removed from 350 to just 8. Express lanes added 

much-needed new lanes to the Beltway and also created a travel network for buses and carpools. A P3 

with tolls helped to fund the improvements. The I-495 Express Lanes project was delivered early and 

on budget. 

Through negotiations with Transurban, VDOT was able to implement its policy objective of providing 

a travel time advantage for transit and high-occupancy vehicle (HOV) 3+ on this section of the Capital 

Beltway for the first time. Their agreement defined the process by which Transurban could set toll 

rates and adjust those rates over time to meet financial obligations (within certain constraints). 

Specific permitted vehicle categories were explicitly defined: 

• “High-Occupancy Vehicles equipped with a transponder shall be entitled to use the HighOccupancy Toll (HOT) Lanes at a 100% discount from otherwise applicable tolls.

• Mass Transit Vehicles and Commuter Buses, school buses, motorcycles and Exempt Vehicles 

equipped with a transponder shall be entitled to use the HOT Lanes at a 100% discount from 

otherwise applicable tolls.

• Permitted Vehicles (other than vehicles referred to in the preceding clauses)) equipped with a 

transponder shall be entitled to use the HOT Lanes subject to payment of the applicable tolls.”

Transurban has assumed the traffic and revenue risk on the Express Lanes projects. Simply put, if the 

project is a commercial success, then the Commonwealth of Virginia will share in that success, 

through a revenue sharing agreement; if the project fails commercially, the private sector bears that 

risk alone. The Commonwealth will not be responsible for paying back any debt and is not required to 

pay the private sector if the project were to fail.

44 Lev Pinelis, Transurban. FHWA Tolling and Pricing Back Office Issues Peer Exchange. Hanover, MD, May 6, 2014.
38 | CONGESTION PRICING A Primer on Back Office Issues

The agreement also contains specific language to protect Transurban in the event that HOV traffic far 

exceeds projected volumes in the future, thereby greatly limiting toll revenue. The Commonwealth 

would assist in subsidizing HOV should carpool rates far exceed projections. While significant 

growth in carpools would be a great thing for the region and would help alleviate congestion, if HOV 

use grows at unexpected rates, there is a chance that the Express Lanes may not be able to collect 

enough tolls to operate and maintain the lanes. The Commonwealth would provide limited funding to 

help subsidize costs and ensure HOVs continue to have top priority and quality travel. While VDOT 

and Transurban agree that this provision is unlikely to go into effect, the private partner could not 

have financed the project if there was a risk that the lanes would fill up entirely with carpools, 

whereby they would not have an opportunity to collect revenue.

The contract provisions under which VDOT would be obligated to subsidize operations for I-95 and 

I-495 vary slightly, as described below.

I-495 EXPRESS LANES: “The Department agrees to pay the Concessionaire an amount equal to 

70% of the average toll in the unlikely event that the following events occur:

• HOV vehicles exceed 24 percent of total traffic flow in the same direction for 30 consecutive 

minutes; and

• Average traffic in the same direction exceeds 3,200 vehicles per hour based on two lanes.”

This provision for I-495 only applies for the first 40 years. It will cease to apply if the private partners 

meet a certain rate of return.

I-95 EXPRESS LANES: The following strict conditions must be met:

• Express Lanes must be running at full capacity with 1,450 vehicles per hour, per lane

• HOV users exceed 35% of traffic across two consecutive tolling sections for more than 30 

minutes.

Payments would be made only during the precise periods when these conditions are all met. The 

provision is applicable only for about the first half of the partnership, during which the 95 Express 

Lanes will be responsible for substantial construction debt payments.

 Virginia Case Study (continued)
CONGESTION PRICING A Primer on Back Office Issues | 39

Lessons Learned

Implementing a congestion pricing regime 

involves overcoming complex challenges. These 

challenges are found both internally within an 

agency and externally in the public and among 

outside partner transportation agencies. Many of 

the congestion pricing challenges fall into a 

broad category of back office issues, which have 

been explored in this primer. 

The following back office issues tend to cut 

across the different types of congestion 

pricing projects, including variably priced 

lanes, zone-based pricing, and parking 

pricing: 

• Policy decisions that drive business rules. 

• Interoperability. 

• Back office efficiency. 

• Enforcement. 

• Data analysis and warehouse. 

• Transparency. 

• Privacy. 

• Private sector involvement.

These issues point to a substantial shift in how 

traditional transportation agencies implement 

and operate toll-related projects. Many public 

agencies that are operating congestion priced and 

tolled facilities for the first time have recognized 

the need to transition from their current role of 

delivering transportation facilities to a new role 

that emphasizes a full customer-driven approach. 

The move toward a customer service-oriented 

perspective requires a new organizational 

approach and a new type of leadership. As 

various types of congestion pricing projects 

continue to be deployed, organizations can build 

on the back office ideas summarized in this 

primer to make their programs more successful.

These back office issues are often overlooked 

early in the project development process for 

congestion pricing projects. Project goals and 

objectives and transportation agency policies 

may be assumed by the project manager but not 

necessarily explicitly articulated and formalized. 

The collective experience of the Back Office 

Peer Exchange panelists and other congestion 

pricing professionals that contributed to this 

primer indicates that project managers will be 

dealing with these issues during the course of 

project development. In most cases, these experts 

wished that they had addressed these issues 

earlier and in coordination with other key 

development issues, avoiding some delays due to 

changes in project direction and costly 

technology retrofits. 

A checklist that can assist the new congestion 

pricing project manager early in the project 

development process appears in Appendix A. 

CONGESTION PRICING A Primer on Back Office Issues | 41

REFERENCES

1. Perez, Benjamin G., et. al. (2012, October). Priced Managed Lanes Guide. FHWA-HOP-13-007. 

Parsons Brinckerhoff. Washington, DC.

2. Florida Department of Transportation. (2014, May). Southeast Florida Express Lanes-Regional 

Concept for Transportation Operations. Miami, FL. 

3. Buckeye, Kenneth. (2010, November revised). Managed Lane Innovations: Minnesota Interstate 

35W. Minnesota Department of Transportation. TRB 2011 Annual Meeting. Washington, DC. 

4. Buckeye, Kenneth, et. al. (2013, July). I-35W South MnPASS HOT Lanes. TRB 2013 Annual 

Meeting. Washington, DC. 

5. Federal Highway Administration. (2012, May). Contemporary Approaches to Parking Pricing: A 

Primer (FHWA Pub. No. FHWA-HOP-12-026). Washington, DC.

6. Federal Highway Administration. (2013, July). National Congestion Pricing Conference 

Summary. Seattle, WA. 

7. K.T. Analytics and Cambridge Systematics. (2008, August). Value Pricing Pilot Program: 

Lessons Learned. 

RESOURCES 

The Federal Highway Administration (FHWA) conducted a Tolling and Pricing Back Office 

Issues Peer Exchange in Hanover, MD, on May 6, 2014, to discuss the range of institutional 

issues associated with a range of congestion pricing projects. Additionally, content for this primer 

was taken from presentations that were given at the National Congestion Pricing Conference in 

Seattle, WA, on July 9-11, 2013. The following professionals participated in one or both of these 

two events. 

Name Organization

Ken Buckeye Minnesota Department of Transportation

Diane Gutierrez-Scaccetti Florida Department of Transportation

Susan Shaw Virginia Department of Transportation

David Caudill Virginia Department of Transportation

Lev Pinelis Transurban, Inc.

Samuel Johnson San Diego Association of Governments

Patty Rubstello Washington State Department of Transportation

References and Resources

Table 1. National Congestion Pricing Conferences attendees.
42 | CONGESTION PRICING A Primer on Back Office Issues

Name Organization

Alex Demisch San Francisco Municipal Transportation Authority

Mark Muriello Port Authority of New York and New Jersey

Michael Cheroutes Colorado Department of Transportation

Tom Gugel Maryland Transportation Authority

Jay Primus San Francisco Municipal Transportation Authority

Jack Opiola D'Artagnan Consulting

Angela Jacobs FHWA

Myron Swisher Leidos

Cara O’Donnell Leidos

Table 1. National Congestion Pricing Conferences attendees (continued).
CONGESTION PRICING A Primer on Back Office Issues | 43

Here is a simple checklist that can assist the new congestion pricing project manager early in the 

project development process:

 Establish what objectives the agency is trying to achieve to match policies.

 Design back office capabilities and technology to match these policies and objectives.

 Involve all managed lane and tolling operators in the region early in the planning process to align 

business rules, allowing for interoperable technology and back office operations. 

 Consider ease of use by customers, revenue potential, risks, and retrofit costs in planning and 

designing for interoperable networks.

 Take a long-term view of back office operation design efficiencies through consistency and 

standardization among all toll facilities.

 Consider private sector involvement to optimize use of rapidly developing advanced technologies.

 Develop policies and operations for enforcement prior to design of procedures and technology.

 Are you providing for multiple toll payment methods – thereby reducing violations?

 Identify purpose, need, and requirements of data systems in the planning phase as business rules 

are being established.

 Determine the ultimate data analysis, architecture, and warehousing needs for charging the correct 

market-driven rates.

 Be transparent with operations strategies and processes, as well as the performance of the system, 

in order to earn the trust and support of the public.

 Develop a plan to proactively share appropriate traffic and revenue information and data.

 Establish a data use process to support toll collection and enforcement that protects the privacy of 

users’ account information, in compliance with State data privacy regulations. 

 Create a policy describing the request process for and content of publicly available data and 

information.

 Are you capitalizing on the strengths of the private sector in your State, including innovation, 

operational flexibility, and accelerated project delivery?

 Would a Public-Private Partnership help provide the funding, technological expertise, and tolling 

operations experience needed for your project to meet the agencies’ goals and objectives?

For more information on these checklist items, refer back to the eight topical chapters of this primer. 

Also, the case studies in each chapter provide details of what your peers actually did on their projects, 

in response to some of these checklist items. 

Appendix


U.S Department of Transportation 

Federal Highway Administration 

Office of Operations 

1200 New Jersey Avenue, SE 

Washington, DC 20590 

www.ops.fhwa.dot.gov

March 2016

FHWA-HOP-15-037