Transportation Asset Management Case Studies 

ECONOMICS IN ASSET MANAGEMENT 

The Ohio-Kentucky-Indiana Regional 

Council of Governments Experience 

 
John A. Roebling Suspension Bridge, connecting 

Covington, KY and Cincinnati, OH. 

FRONT COVER PHOTO: 

Interstate 47, Campbell County, KY. 
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Note From the Associate Administrator 

The Federal Highway Administration’s Office of Asset Manage 

ment is promoting a different way for transportation agencies 

to distribute their resources among alternative investment 

options. This new way of doing business, referred to as “Asset 

Management,” is a strategic approach to maximizing the ben 

efits resulting from the expenditure of agency resources. 

For any transportation agency, the progression toward Asset 

Management will involve a myriad of activities. These endeav 

ors will differ from State to State. For example, some agencies 

will pursue a data integration strategy in order to ensure 

comparable data for the evaluation of investment alterna 

tives across asset classes. Others will move to deploy economic 

analysis tools to generate fact-based information for decision 

makers. Still others will want to integrate new inventory 

assessment methods into their decision-making processes. 

Much can be learned from those who are readying for or 

have transitioned their organizations to Asset Management. 

To spark the exchange of information, we are conducting a 

series of case studies focused on agencies that are leading 

the way. To date, we have established five tracks of emphasis 

regarding Asset Management: data integration, economics in 

Asset Management, the Highway Economic Requirements Sys 

tem–State Version, life-cycle cost analysis, and bridge manage 

ment. In upcoming years we will continue to add new State 

and local reports to each of the tracks and will create new 

tracks addressing additional facets of Asset Management such 

as change management and performance measurement. 

On behalf of the Office of Asset Management, I am pleased to 

introduce this addition to the case study series. We believe the 

case studies will help agencies meet the challenges of imple 

menting Asset Management programs. 

King W. Gee 

Associate Administrator, Office of Infrastructure 
 

Note to the Reader 

The Transportation Asset Management Case Study Series is 

the result of a partnership between State departments of 

transportation, local government agencies, and the Federal 

Highway Administration’s (FHWA’s) Office of Asset Management. FHWA provides the forum from which to share information, and the individual States and local government 

agencies provide the details of their experiences. For each 

case study report, State or local government agency transportation staffs were interviewed by FHWA, and the State or local 

government agency approved the resulting material. As such, 

the case studies rely on the agencies’ own assessment of their 

experience. Readers should note that the reported results 

may or may not be reproducible in other organizations. ■

Walnut Street, Lawrenceburg, IN. 
 

Executive Summary 

The Ohio-Kentucky-Indiana Regional Council of Governments 

(OKI), the Metropolitan Planning Organization (MPO) located 

in Cincinnati, is engaged in a process to improve its ability to 

plan transportation improvements through the use of economic 

analysis methods. These methods are intended to augment 

OKI’s existing evaluation approaches to small- and large-scale 

transportation projects. 

For analysis of individual projects in the Transportation 

Improvement Program (TIP), OKI staff utilizes a Prioritization 

Process, in which scores are applied to a host of transportation, 

planning, and cost factors. Projects are then ranked according 

to total scores. 

In the past, OKI made occasional use of economic analysis 

for large corridor projects, although typically this analysis was 

limited to very large projects and was performed by outside 

experts. To attain broader application of benefit-cost techniques 

and also reduce the cost of such analyses, OKI has recently 

explored methods to do in-house economic analyses of surface 

transportation projects. As part of this effort, OKI investigated 

the potential use of the FHWA’s Surface Transportation Efficiency 

Analysis Model (STEAM) software for the analysis of large projects and clusters of smaller projects. 

The FHWA developed the STEAM software through a private 

contractor in the late 1990’s to facilitate detailed corridor and 

system-wide economic analysis of large transportation projects. 

STEAM post-processes trip time, distance, and other information 

already generated by travel demand models to compute the net 

value of mobility and safety benefits attributable to regionally 

important transportation projects. 

Using model documentation from the FHWA website for 

STEAM, OKI was able to integrate the STEAM software with its 

travel demand model and to run STEAM. In 2004, OKI contacted 

the FHWA to request some programming changes to STEAM to 

accommodate parameters needed by OKI, and to seek limited 

technical assistance on updating and interpreting STEAM data. 

The FHWA responded by commissioning updates to STEAM, 

establishing limited technical support services, and providing 

guidance on appropriate economic data. In April 2006, the 

FHWA also made a site visit to Cincinnati. This process contributed to OKI’s successful conclusion of a STEAM modeling exercise 

for a group of five projects. 

Lessons learned in the exercise have been beneficial to both 

OKI and the FHWA. OKI was able to establish a successful 

interface with the STEAM software that can be replicated in the 

economic evaluation of additional projects in the future. OKI 

enhanced the value of its analysis by thoroughly and publicly 
4 

developing location-specific data for key STEAM inputs, by 

which OKI also improved its skills in updating and interpreting economic data associated with transportation projects. 

Finally, OKI identified important programming constraints 

of the STEAM software and reported them to the FHWA. 

Through its cooperation with OKI, the FHWA team was 

able to make the STEAM software more useful for a typical 

MPO application. It improved the user interface and also 

developed a post-processing spreadsheet for the STEAM 

results that allows outcomes for a limited number of modeled 

analysis years to be prorated to all other years of the analysis 

period. This new spreadsheet tool greatly enhances the quality of STEAM’s benefit-cost results and is now available for 

other users as well. 

The FHWA also identified the need for additional technical 

guidance on integrating STEAM with travel demand models. 

Accordingly, the FHWA has commissioned the production of 

additional guidance to address what types of projects are 

appropriate for STEAM analysis; how to develop the appropriate STEAM inputs from the travel demand model for these 

projects; and how to determine if the results of the travel 

demand model analysis constitute valid input into the STEAM 

model. 

OKI remains committed to implementing STEAM wherever 

appropriate in its planning process—generally for large projects or clusters of projects amenable to travel demand modeling and STEAM. As tools become available and staff expertise 

is developed, OKI will also make use of benefit-cost analysis 

tools that can be run independently of travel demand models 

to evaluate smaller projects. Collectively, OKI anticipates that 

the economic data provided by these tools will strengthen its 

Prioritization Process, enhancing the ability of the organization to demonstrate that the public receives the best value for 

its transportation dollars. ■
 

Carew Tower, Cincinnati, OH. 
 

 

INTRODUCTION 

According to the American Association of State Highway and 

Transportation Officials, “Transportation Asset Management (TAM) is 

a strategic and systematic process of operating, maintaining, upgrading, 

and expanding physical assets effectively through their life cycle. It 

focuses on business and engineering practices for resource allocation 

and utilization, with the objective of better decision-making based upon 

quality information and well-defined objectives.” Economic analysis 

plays a critical role in TAM by facilitating tradeoff analysis, in which the 

net benefits of competing investment options are compared in terms of 

their life cycle “dollars and cents” impacts on the public. Planners and 

engineers can use information from this analysis to identify the most 

beneficial investments based on economic considerations. 

Ohio-Kentucky-Indiana Regional Council of Governments (OKI) is a 

Metropolitan Planning Organization (MPO) that considers a wide range 

of options for addressing transportation needs for its region. Within its 

Congestion Management Process (CMP), these options include capital investments as well as Transportation System Management (TSM) 

approaches. TSM is similar to and incorporates many of the key features 

of TAM. It is a process of broadening the range of alternatives that 

should be evaluated in addressing a transportation problem. Rather than 

focusing primarily on new construction to solve capacity problems, it 

emphasizes better management and operations of the existing system. 

Using TSM, OKI monitors the performance of the system, identifies 

alternative strategies to mitigate congestion, and assesses the effectiveness 

of implemented actions. To facilitate the comparison of alternatives, OKI 

utilizes a project scoring tool which incorporates social, environmental, 

and economic factors. The agency is aggressively pursuing greater use of 

life cycle economic analysis tools in its evaluation of alternatives. 

The application of economic analysis by an MPO to planning, particularly within the context of a management system with TAM components, is a matter of particular interest to the Nation’s transportation 

community. MPO’s select almost all of the Nation’s urban transportation 

projects, and are most directly confronted with the tasks of allocating 

capital improvement resources to accomplish multiple objectives, including congestion relief and infrastructure replacement and reconstruction. 

The FHWA’s Office of Asset Management has therefore selected OKI as a 

case study for applications of economic analysis in TAM. OKI personnel 

represent an important national resource with regard to their experience 

in implementing economic analysis methods at the MPO level. The fol­
7 

lowing case study summarizes this experience, highlighting the process, 

challenges, and potential rewards of the implementation of economic 

analysis techniques in MPO planning. 

PERTINENT AGENCY FACTS 

OKI is the planning agency designated as the MPO for the greater 

Cincinnati area. OKI is governed by a Board of Directors comprised 

of approximately 117 members representing elected officials from each 

member County and each city over 5,000 persons; county planning 

agencies; residents; transportation/transit agencies; townships over 40,000; 

and other elected or responsible persons. 

The Board of Directors meets on a quarterly basis. An Executive 

Committee of approximately 40 members of the Board meets monthly to 

review and direct the activity of the staff. The Intermodal Coordinating 

Committee (ICC) meets on a monthly basis and makes recommendations 

to the Executive Committee and the Board of Directors. 

Among its responsibilities, OKI develops the 20-year Long Range 

Plan and the four-year Transportation Improvement Program (TIP) for 

the greater Cincinnati region. OKI has final authority over selecting 

the transportation projects on which Federal dollars will be spent in 

the region. In 2005, OKI approved over $30 million in funding for 

projects in this region. The ICC deals with all aspects of the preparation, 

maintenance, and amendment of the TIP, including ensuring the precepts 

of TSM are applied in the process of short range planning. 

The region covered by OKI is composed of eight counties in three 

states: Butler, Clermont, Hamilton, and Warren counties in Ohio; Boone, 

Campbell, and Kenton counties in Kentucky; and Dearborn County 

in Indiana. The total region included 1,940,545 people and 968,680 

workers as of 2005 and 2,636 square miles of total area (see Figure 1). The 

region is expected to grow to almost 2.3 million residents and 1.2 million 

workers from 2005 to 2030. Hamilton County will remain the dominant 

county in terms of population and employment, but most outlying 

counties will gain increasing shares over the planning period. 
 

Figure 1: The OKI Region. 

Within the eight-county region are the following transportation assets and 

services: 

• More than 3,000 centerline miles of major roadway, 6,000 centerline 

miles of other roadway, and 398 centerline miles of the 160,000-mile 

National Highway System; 

• Three transit providers provide fixed-route service and three other 

providers serve communities with demand responsive service; 

• 19 formal vanpools operate within the region; 

• 55 official park-and-ride lots, 45 of which have transit service; 

• 77 miles of bike paths and trails, as well as bicycle access to 9,000 

miles of roadways; 
 

• 10 publicly owned airports (including one air carrier, three reliever, 

and five general aviation facilities) and two privately owned 

airports operate in the region. The Cincinnati/Northern Kentucky 

International Airport is the air carrier airport; 

• Amtrak’s Cardinal route serves the region with stops three days per 

week in the City of Hamilton and Union Terminal in Cincinnati; 

• Privately owned and operated intercity bus service, most notably 

Greyhound Lines; and 

• Ferry service on the Ohio River operated by Anderson Ferry. 

Upper Tug Fork Road, Campbell County, KY. 
0 

SETTING THE STAGE 

What Does OKI Have? 

As noted in the Introduction, OKI’s Congestion Management Process 

includes capital investment applications as well as Transportation System Management (TSM) techniques to guide the development of its 

long-range and short-range transportation planning, including its Transportation Improvement Plan (TIP). The TIP implements portions of 

OKI’s 2030 Regional Transportation Plan by programming funding for 

improvements over the next four-year period. It is a compilation of all 

publicly assisted transportation programs, including highway and transit 

projects, constrained to available funding levels and prioritized by need. 

Upon adoption by the OKI policy board, the TIP becomes a programming document that directs the flow of transportation improvements in 

the region. Under Federal law, an MPO must prepare a Long Range Plan 

and a TIP; moreover, a project must be included in both the Plan and the 

TIP as a prerequisite for Federal funding assistance. 

Potential TIP projects eligible for Federal Congestion Mitigation/Air 

Quality (CMAQ) or Surface Transportation Program (STP) are reviewed 

by OKI’s Prioritization Subcommittee. A key component of the Committee’s Prioritization Process is the Project Scoring Process. 

Under the Project Scoring Process, highway and transit projects are 

first scored separately using Transportation Factors. Transportation factors 

take into account items to be examined during the construction/acquisition phase of a project. A subtotal of 45 points is available from the 

transportation factors. All projects are next scored on Planning Factors, 

which are factors that should have been considered during the planning, 

or development phase, of the project. A subtotal of 50 points is available 

from the planning factors. Finally, all applications are subjected to a Benefit/Cost ratio evaluation that provides up to ten additional points, resulting in a total possible 105 points. 

Transportation factors applied to roadway projects, usually with a 1 to 

5 score for each factor, include the following: existing safety; impact on 

safety; existing level of service (LOS); impact on LOS; average daily traffic; status as a freight corridor; roadway classification; conformance with 

existing design standards; and status of the project (how soon construction can begin). 

Transportation factors applied to transit projects include: project 

impact on safety and security; useful life of the project; service improvements; system impact; type; time to implementation; ridership impact; 
 

capital utilization of the item being replaced; and planning/forecasting 

(higher points are given for transit projects that have been in an adopted 

planning document). 

Planning factors applied to all projects, also using scores typically 

ranging from 1 to 5 for each factor, are as follows: replacement/expansion factor (this factor gives preference to projects that invest in replacement and preservation rather than new facilities, in accordance with the 

OKI TSM approach); environmental justice; land use conformance; air 

quality/energy improvements (up to 10 points if vehicle hours traveled, 

vehicle miles traveled, and air emissions are reduced); local funding share 

(up to 10 points if the local sponsor overmatches its 20 percent share by 

30 percent); number of travel modes improved; intermodal connectivity; 

and the existing condition of the project area. 

The final scoring section for all projects makes use of a hybrid benefit/cost ratio analysis. Cost is readily available in dollar terms, while the 

benefit side is represented by a surrogate that is valued according to the 

score awarded up to this point for the transportation and planning factors (the points, in effect, represent the intrinsic “benefit” to the region). 

The factor point subtotal (maximum 95) is divided by the cost of the 

proposal (in millions of dollars). The subsequent value (which can have a 

very wide numerical range) is then scored from two to ten points via the 

scale shown in Table 1. When added to the previous subtotal, a maximum 

of 105 points is possible. OKI staff initially selected this hybrid method 

due to the extensive variability in project types and the amount of time it 

would take to do a true dollar-based benefit-cost analysis with then-available tools. 

Table 1: Benefit/Cost Points Scale 

Benefit/Cost (Project Transportation and 

Planning Points Divided by 

Project Cost, in $Million) 

Points 

Available 

Greater than 1,000 10 

Greater than 100 8 

Greater than 10 6 

Greater than 5 4 

Greater than 1 2 
 

The Prioritization Subcommittee can also accommodate projects that do 

not fit the highway or transit definition. In these cases, it examines each 

application and subjectively ranks the application in comparison to the 

highway and transit applications received. 

Once ranked, projects then compete against each other based on the 

funds available in their respective Federal funding categories—either 

CMAQ or STP. After the ICC (the parent committee of the Prioritization Subcommittee) develops a final ranking of CMAQ and STP projects, 

this recommended list is presented to the OKI Executive Committee or 

Board of Directors for review and approval. 

What Does OKI Want? 

OKI is generally satisfied that its Project Scoring Process addresses a comprehensive range of critical transportation and planning factors, including 

the priority OKI assigns to the reconstruction, preservation, and greater 

efficiency of existing infrastructure. Nonetheless, the OKI Prioritization 

Subcommittee continually seeks to improve the scoring process, reviewing 

and revising it on an “as needed” basis. The ICC adopted the last revision to the scoring process on January 20, 2006. 

One area of the scoring process that OKI has targeted for future 

improvement pertains to reducing the reliance of the method on qualitative scoring methods. For instance, the “Project Impact on LOS” factor 

used for roadway projects assigns a score of 5 to projects with “High 

Impacts,” 3 to projects with “Medium Impacts,” and 1 to projects with 

“Low Impacts.” The specific criteria for gauging what are high versus 

medium or low impacts are not specified but rather left to expert judgment. Similarly, the scoring of a project with an average daily traffic 

(ADT) flow of more than 25,000 at 5 points, versus a project at over 

20,000 ADT at 4 points, can lead to an artificial distinction being drawn 

between a project that serves 24,900 ADT and another that serves 25,100 

ADT. 

The hybrid benefit/cost ratio approach used in the Project Scoring 

Process mixes dollar-based costs with a point-based benefit measure. In 

this system, benefits are capped at no higher than 105 points, and a total 

benefit score may not change significantly even if one project saves many 

times more hours of travel time than another project. For instance, a 

capacity project on the same congested roadway that has a very large 

impact on LOS would score only 2 points more on the 105-point scale 

than a project with a medium impact. Even if the high-LOS-impact 

project costs only marginally more, it is possible that it would not com­
 

pete effectively against the medium-impact project. The selection bias 

in the hybrid benefit/cost ratio approach would be most pronounced for 

larger projects, where high benefit streams would not be weighted proportionately to the higher dollar costs of the projects. 

OKI has long recognized that one solution to reducing the subjectivity of assigning point values to the transportation and planning factors 

would be to put some factors into dollar terms and apply economic 

analysis tools to compare the dollar values of benefits to costs directly. 

For instance, 6 of the 8 transportation factors and the air quality/energy 

improvements planning factor in the Project Scoring System are directly 

or indirectly linked to safety and capacity impacts that can be measured 

monetarily. These factors could be measured in terms of crashes avoided; 

hours of travel time reduced; and lower vehicle miles and air emissions 

over the project life cycle. Dollar values could then be assigned to these 

benefits and the totals compared directly to the dollar value of costs. 

Fort Washington Way (Interstate I-71), Cincinnati, OH. 
4 

How Has OKI Attempted to Enhance Its 

Benefit-Cost Analysis Procedure? 

Overall Approach 

The significant impediment that OKI has encountered to date in the 

application of dollar-based benefit-cost analysis (BCA), and the reason 

it developed the existing qualitative rankings of project benefits, was the 

extensive variability in project types and the amount of time it would take 

to do a dollar-based BCA. OKI has used dollar-based BCA for some very 

large projects in recent years, but due to the specialized skills and data 

needed, it relied on outside experts to accomplish the analyses at considerable expense to OKI. 

Still, OKI has continued to search for potential tools that would facilitate more applications of dollar-based BCA to projects. Of particular 

importance to OKI in this search is that the tools should be usable by 

OKI staff, affordable to acquire and operate, and make use of existing 

data resources and staff skills to the extent possible. OKI has an experienced professional staff that includes specialists in planning, transportation modeling, environmental analysis, demography and other specialties, 

but does not have a staff economist. Therefore, a useful economic analysis tool would need to come supplied with economic data and supporting 

guidance. Other objectives of importance to OKI in selecting a BCA tool 

are that the model be recognized by Federal and State partners and able 

to accommodate transit as well as highway projects. 

In 2004, following a review of publicly available BCA models, the 

OKI staff decided to explore the use of the Surface Transportation Efficiency Analysis Model (STEAM) developed by the FHWA in the 1990’s. 

STEAM 

In the late 1990’s, in response to guidance in the Intermodal Surface 

Transportation Efficiency Act of 1991 and, subsequently, the Transportation Equity Act for the 21st Century, the FHWA undertook the 

development of tools to assess the efficacy of multimodal transportation 

alternatives and demand management strategies. As part of this effort, the 

FHWA developed a computer-based procedure for linking the outputs of 

regional travel demand model outputs with computerized procedures to 

evaluate system, corridor, or project alternatives from an economic analysis standpoint. 
 

STEAM accepts input directly from the four-step travel demand 

modeling process that is used by most MPOs in their planning exercises. 

It post-processes the traffic assignment outputs from the travel demand 

model, and its speed models account for the build up and dissipation 

of vehicle queuing, to estimate highway travel speeds under congested 

conditions. It also uses vehicle hours traveled (VHT) and vehicle miles 

traveled (VMT) data generated by the travel demand model to calculate travel time, vehicle operating and safety impacts, as well as impact 

measures pertaining to air emissions and energy consumption. STEAM 

then monetizes the post-processed impact measures of the travel demand 

model, using dollar values for time, vehicle operating costs, safety, and 

emissions that can be localized for specific analyses. It also allows the analyst to perform risk analysis, thereby minimizing the potential for controversy about the selected unit monetary values for travel benefits or impact 

estimates. STEAM produces estimates of system-wide impact; i.e., impact 

estimation is not limited to the improvement corridor or project. 

OKI downloaded the STEAM software and user documentation from 

the FHWA STEAM website. Following a review of the documentation 

and inquiries to other organizations familiar with STEAM, OKI ascertained that its in-house travel demand model and modeling expertise 

would be compatible with the STEAM software requirements. OKI then 

began the process of implementing the STEAM analysis. 

Initial Configuration of STEAM 

The OKI Travel Demand Model is a key tool in many of OKI’s work 

elements, including corridor studies, air quality analysis, and long-range 

transportation planning. The current version (6.3) of this model is composed of TRANPLAN programs and a series of FORTRAN programs 

written by OKI. It is a state-of-the-practice model that uses the standard 

four-step sequential modeling approach of trip generation, distribution, 

modal choice, and assignment. The model uses demographic and land 

use data and capacity and free-flow speed characteristics for each roadway 

segment in the network to produce a “loaded” highway network with 

forecasted traffic volumes with revised speeds based on specified speed/ 

volume relationships. The model also accounts for travel demand among 

multiple modes, including transit and auto, through a mode choice component, also a standard feature of state-of-the-practice models. 

OKI’s first task prior to running the STEAM model was to establish the interface between its travel demand model and STEAM. OKI 
 

attained initial success in this task in October 2004. To create data from 

the travel demand model in the format needed for the STEAM program 

applications, OKI added programs to its travel demand model stream. It 

eventually documented the specifications of the required batch job control file, procedures, and input/output files in a draft document entitled 

“Preparation of Travel Demand Model Data for STEAM” (March 10, 

2006). The documentation covers the generation of the following data 

files for STEAM: highway network speeds; zonal socioeconomic data; 

highway and transit person trips; and transit travel times, mode shares, 

and other data. 

The BCA module in STEAM includes many economic variables 

whose values can be set by the user. If the user lacks data, STEAM contains default values—although these values are not regionally specific 

and typically should be updated to adjust for inflation. OKI undertook 

a thorough review of the default economic and other values provided in 

STEAM to make sure they were appropriate for the OKI region. This 

process was documented by OKI in the draft document “Preparation of 

Values for Variables in STEAM” (March 10, 2006). Among the many 

values researched and updated by OKI were the value of travel time by 

mode; the cost per gallon of fuel; cost per crash; and project capital costs. 

OKI made use of industry data reported in public documents, and updated cost data using a variety of national and regional price indices. 

FHWA Support to OKI 

Early in its effort to implement STEAM, OKI contacted the FHWA’s 

Office of Asset Management for technical support on the implementation, operation, and interpretation of STEAM model results. OKI initially contacted the FHWA in June 2004 as part of its survey of available 

economic models. Representatives of OKI also attended one of FHWA’s 

“Economic Analysis for Highway Decision-Makers” workshops, held in 

Frankfort, KY, in August 2004. 

In October 2004, OKI notified the FHWA that it had successfully run 

STEAM but had encountered constraints in the model that needed to be 

corrected before the model could accommodate the analysis required by 

OKI. Among these constraints was an inability for the user to change 

STEAM’s default discount rate (by which the model captures the opportunity cost of money) and an unrealistically low cap on the maximum 

allowed capital costs of transportation projects. 

The FHWA agreed that the constraints identified by OKI imposed 

significant restrictions on the utility of STEAM results for OKI and other 
 

7 

potential STEAM users. In February 2005, the FHWA initiated a small 

contract with the consultant that originally developed STEAM to modify 

the source code and to provide other programming and technical support to STEAM users. The contractor completed the initial fixes to the 

STEAM model in March 2005 and implemented improvements to the 

STEAM website. 

Thereafter, OKI and the FHWA interacted regularly on a range of 

issues associated with the operation and interpretation of STEAM and 

appropriate economic values to be used in the model. In April 2006, 

OKI invited the FHWA to Cincinnati to 1) review its data and documentation; 2) evaluate a STEAM assessment of a trial group of six projects; 

and 3) provide a presentation to the OKI Board of Directors on the role 

of economic analysis and STEAM in transportation program planning. 

Refining the STEAM Specifications 

The FHWA review team met with OKI in Cincinnati in April 2006. 

The review team suggested a few minor changes to the input parameters 

for the STEAM BCA. Overall, the FHWA team found that the documentation provided in the OKI briefing papers was exemplary in its thoroughness and clarity. The FHWA team also cautioned OKI on the need 

to coordinate its STEAM analysis with the environmental process and to 

use particular care in the valuation of environmental parameters in the 

STEAM model. 

The FHWA review team and OKI spent a substantial amount of 

time discussing the six projects being evaluated with STEAM. OKI had 

selected the projects for the trial STEAM evaluation because their impacts 

were already well understood based on the completed “Southwest Warren 

County Transportation Study.” The projects consisted of three lane additions, a road extension, a new interchange, and an interchange improvement. 

Earlier OKI testing on other similar projects revealed that STEAM 

was not appropriate for evaluation of each of the six projects separately 

due to the limited size of each individual project compared to the size of 

the region and the fact that some projects would not be implemented for 

more than 20 years. The FHWA team made the following recommendations to obtain more robust results from the STEAM model: 

• The projects should be evaluated as a group rather than individually. 

This approach was consistent with the MPO’s intent to review the 

projects as a group in the prioritization process and was consistent 
 

 

with observations from the prior study of the complementary nature 

of the individual projects. The combined effects of the projects in 

southwest Warren County would provide an unambiguous indication, in the travel demand model, of impacts to a clearly identifiable 

segment of the travel market, and consequently, would be revealed in 

the STEAM results. 

• The interchange improvement project that primarily addressed safety 

and queuing should be excluded from the analysis. The impacts of 

these types of projects are not generally well represented in travel 

demand models and thus would not show up well in STEAM results. 

• Although treated as a group, the remaining five projects would be 

modeled as being implemented at separate discrete points in time 

over a 20-year analysis period to reflect their different planned implementation dates. This approach involved several runs of the travel 

demand model and STEAM for different years, with and without 

specified projects. Based on these multiple runs, the benefits and 

costs for all the projects could be interpolated and summed up to 

yield a collective net benefits value. 

To facilitate this consolidated project analysis, the FHWA team developed a new spreadsheet tool named “STEAMStream”. The spreadsheet 

used the net benefit totals generated by STEAM for discrete analysis years 

(i.e., 2015, 2020, and 2030) and interpolated them to intermediate years 

of the analysis period (e.g., 2016, 2017, etc.), and then summed them to 

their present values. This tool not only enhanced the ability of STEAM 

to handle project groups but provided a more robust estimate of the net 

benefits of surface transportation projects than was provided by STEAM 

before the OKI application. 

Interpretation of STEAM Results 

Following the development of the STEAMStream spreadsheet tool, OKI 

developed the results of the STEAM BCA of the five Southwest Warren 

projects (see Table 2). The FHWA review team helped OKI review the 

STEAM results for reasonableness and consistency. 

Collectively, the results show the overall package is cost-beneficial, 

with the present value of transportation benefits exceeding the present 

value of costs. The findings of the analysis are generally supportive of 

those of the “Southwest Warren County Transportation Study,” with one 

exception. The STEAMStream results indicated that one project in the 
 

group, an intersection project to be implemented in 2030, caused some 

erosion in net benefits of the projects as a group. The reason for this 

erosion of net benefits is unclear. However, a contributing factor may be 

that the project falls in the last year of the analysis period covered by the 

travel demand model runs, before it can begin to generate its full benefit 

stream based on future traffic growth. 

OKI intended that the application of STEAM to the Southwest Warren County projects serve only as a test of the STEAM process. In a real 

planning situation where STEAM was being used to evaluate the best 

project mix, OKI would have treated the adverse results for the one intersection project as guidance to review the assumptions about the project’s 

overall cost and performance. If possible, OKI would re-test the intersection project by implementing it as an earlier date (e.g., 2025) or by conducting an additional STEAM analysis for the year 2040. Finally, even if 

the STEAM analysis results still did not support the intersection project, 

it would be valid for OKI to decide for the project based on other information (e.g., safety benefits not captured by STEAM). An economic 

analysis process is intended only to assist decision-makers in evaluating a 

project—it does not make decisions for them. 

Table 2: Summary of Benefit-Cost Results for Southwest Warren 

County Projects 

Category Measures 

Costs $62,350,000 

Benefits $140,764,000 

Benefit/Cost Ratio 2.26 
 

0 

MOVING AHEAD 

Commitment to Pursue Economic Analysis to 

Support Transportation Planning 

OKI’s experience with STEAM to date has largely been experimental. 

OKI has invested the staff time necessary to master the underlying economic concepts, extract and format the travel demand outputs, and to 

master the STEAM software itself. Hard work, creativity, and persistence 

have been key ingredients in this effort. The return for this investment is 

a potentially strengthened analytical and review process for its long range 

transportation plan and TIP development. Now that it has the skills and 

tools to undertake future STEAM analyses with much less effort, OKI 

reports that it will consider the application of STEAM in the future to 

appropriate large-scale projects and clusters of related individual projects 

as part of its planning process. 

OKI recognizes that it also needs economic analysis tools that can 

be applied to smaller scale transportation projects. Smaller projects, or 

projects intended principally to improve safety, have limited effects on 

regional traffic that cannot be modeled accurately with the current travel 

demand models needed to support STEAM. Accordingly, OKI is investigating the use of a variety of economic analysis tools that focus only on 

the immediate effects of a transportation project on traffic volumes and 

safety of the project in question. These tools do not need the intermediate processing support of a travel demand model. OKI hopes to use the 

economic data developed for STEAM to support this more localized form 

of economic analysis of surface transportation projects. 

Was It Worth It? 

OKI is continually striving to provide better transportation planning to 

the citizens of the eight counties the agency serves. Accordingly, OKI has 

devoted a significant amount of staff time and resources to the evaluation 

of economic analysis tools and data, and the integration of the STEAM 

model with OKI’s travel demand model. To date, over 1,500 staff hours 

have been devoted to this effort. These staff hours were provided even 

though there are significant competing demands for OKI staff time and 

only limited Federal requirements for economic analysis of most surface 

transportation projects. 

The successful trial of the STEAM model, as well as the research into 

economic analysis that OKI undertook to select and provide data to 
 

 

 

STEAM, has significantly advanced OKI’s agenda of incorporating more 

economic analysis into its transportation planning process. For instance, 

OKI can interpret travel demand model output from an economic standpoint; determine appropriate monetary values for travel time and vehicle 

miles traveled; adjust them for inflation as needed; and interpret the 

results of economic analysis models. The OKI staff now possesses a body 

of economic analysis skills and information that can be readily used to 

support the planning process. 

In addition to meeting its own needs, OKI has contributed important 

feedback to the FHWA on the STEAM model. This feedback has already 

yielded improvements to STEAM and the technical support for the software. Moreover, based on the experience of OKI, the FHWA has commissioned an improved guidance document for STEAM that will benefit 

OKI and all other users of STEAM. 

The new STEAM guidance will more thoroughly address what types 

of projects are appropriate for analysis by STEAM; how to develop the 

appropriate STEAM inputs from the travel demand model for these projects; how to determine if the results of the travel demand model analysis 

constitute valid input into the STEAM model; and use of the STEAMStream spreadsheet. The guidance will draw upon OKI’s experience 

and research to provide a presentation of the individual steps required to 

accomplish these objectives. 

What Has OKI Learned? 

OKI’s recent experience reveals the following factors that are essential to 

the successful development and implementation of economic analysis 

techniques: 

• Leadership: OKI’s commitment of staff resources to this effort has 

only been possible through the direction and support of top OKI 

and regional leadership. All leadership levels have been fully committed to the development of improved transportation planning 

techniques, of which economic analysis is deemed to be of major 

importance. 

• Staff participation: Staff commitment and skills are also critical. 

OKI employees aggressively pursued the identification of economic 

analysis tools and data. They initiated contacts with relevant Federal, 

State, MPO, and private experts and followed through with these 

personnel to obtain the information needed by them. The OKI 
 

modeling staff demonstrated strong skills and innovation in integrating the OKI travel demand model with STEAM. The stability of 

OKI’s employee base has also been vital, as this effort has been ongoing since 2004 and disruptions caused by staff turnover would have 

been difficult to overcome. 

• Other Agency and Contractor Support. 	 OKI received support from 

the FHWA and State and local planning partners during the development of its STEAM and other economic analysis capabilities. In 

turn, through an FHWA technical support contract, the FHWA 

and OKI received essential support from the contractor that initially 

developed STEAM. It is unlikely that OKI could have succeeded 

without this technical support from the model’s developer. 

• Public outreach. OKI has done an excellent job of informing the 

public of its efforts and progress. This effort helped to generate support for implementing economic analysis tools, which was 

demonstrated by acceptance of the effort in an April 2006 Board of 

Directors meeting. OKI has also produced publicly available documentation of its progress, reassuring the public that progress is being 

made. 

Off-ramp intersecting with Pete Rose Way, Cincinnati, OH. 
 

Newport Southbank Bridge connecting Cincinnati, OH and Newport, KY 

(“Purple People Bridge”). 
4 

What’s Next? 

After much effort, OKI is in a strong position to incorporate additional 

economic analysis methods into its Project Scoring Process and overall 

Congestion Management Process. OKI will continue to scrutinize its 

evaluation mechanisms and will, where appropriate, make use of STEAM 

and smaller scale tools to improve its planning results. The greater use of 

economic analysis and other advanced planning tools is an ongoing process that has the full commitment of OKI and regional leadership, OKI 

staff, and the agencies and contractors available to support OKI. 

Taylor Southgate Bridge connecting Cincinnati, OH and Newport, KY. 
Points of Contact: 

Mr. Mark R. Policinski 

Executive Director 

Ohio-Kentucky-Indiana Regional Council of Governments 

720 East Pete Rose Way, Suite 420 

Cincinnati, OH 45202 

Phone: (513) 621-6300 

Fax: (513) 621-9325 

TDD: (513) 621-7063 

E-mail: mpolicinski@oki.org 

Mr. Robert Koehler 

Deputy Executive Director 

Ohio-Kentucky-Indiana Regional Council of Governments 

720 East Pete Rose Way, Suite 420 

Cincinnati, OH 45202 

Phone: (513) 621-6300 

Fax: (513) 621-9325 

TDD: (513) 621-7063 

E-mail: rkoehler@oki.org 

Ms. Mary Luebbers 

Senior Planner 

Ohio-Kentucky-Indiana Regional Council of Governments 

720 East Pete Rose Way, Suite 420 

Cincinnati, OH 45202 

Phone: (513) 621-6300 

Fax: (513) 621-9325 

TDD: (513) 621-7063 

E-mail: mluebbers@oki.org 

Mr. Eric Gabler 

Economist 

FHWA, Office of Asset Management 

1200 New Jersey Avenue, SE, HIAM-30 

Washington, DC 20590 

Phone: (202) 366-4036 

Fax: (202) 366-9981 

Email: Eric.Gabler@dot.gov 

Photography Credit 

All photos courtesy of OKI. 
Office of Asset Management 

Federal Highway Administration 

U.S. Department of Transportation 

1200 New Jersey Avenue, SE 

Washington, DC 20590 

Telephone: 202-366-0392 

Fax: 202-366-9981 

www.fhwa.dot.gov/infrastructure/asstmgmt 

FHWA-IF-07-028