TRAFFIC INCIDENT MANAGEMENT

Cost Management and Cost Recovery

TRAFFIC INCIDENT MANAGEMENT

Cost Management and Cost Recovery

PRIMER
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FHWA-HOP-12-044

Traffic Incident Management: 

Cost Management and Cost Recovery

Laurel Radow, COTM

This publication provides mid-level managers at transportation agencies with the resources they need to explain the 

benefits of traffic incident management (TIM) and TIM cost management and cost recovery to executive leadership. It 

also provides the same mid-level managers with information that will help them implement TIM cost management and 

cost recovery techniques. Costs recovery is the reimbursement for services from sources outside of the direct budget 

that funds the program seeking reimbursement. Cost management includes all efforts to maximize the cost-benefit 

relationship of program activities and involves a cyclical loop of cost planning, tracking, analysis, and evaluation and 

reprogramming. While costs related to responder and motorist injury, disability, fatality, and the related medical and 

societal costs are not addressed here as those issues are addressed in a variety of ways in the existing literature, 

“recoverable costs” related to TIM such as tactical and strategic costs are addressed. Costs are classified as being recovered when the program receives full or partial reimbursement from sources outside of the budget. The publication 

begins with a discussion of the fundamentals of what constitutes a TIM program as well as the more intricate details of 

what makes a TIM program effective. The document also details information about the fundamentals of cost management and cost recovery, the current state of the practice, and how practitioners can take advantage of opportunities to 

manage and recover costs. The document concludes by recognizing that the conversation of how to pay for recurring 

costs of TIM and transportation operations is just beginning, suggesting what research is still needed to progress in 

TIM cost management and cost recovery. 

SAIC

8301 Greensboro Dr.

McLean, VA 22102

Federal Highway Administration

Office of Operations

1200 New Jersey Ave., SE

Washington, DC 20590

Eric Rensel, Dennis Lebo, Brett Graves, Kathy Malarich, Charles Yorks

Traffic incident Management, TIM, Cost Recovery, Cost 

Management, recoverable cost, cost tracking, incident 

response, resource management, cost accounting

No restrictions. 

Unclassified Unclassified 66 N/A

March 2012

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

Gannett Fleming, Inc 

P.O. Box 67100

Harrisburg, PA 17106
ii

Table of Contents

Introduction.........................................................................................................................................2

Organization .............................................................................................................................................................................4

Challenges/Issues....................................................................................................................................................................4

The Cost of Traffic Incidents................................................................................................................................................6

Chapter 1. TIM Overview.................................................................................................................... 8

TIM Programs............................................................................................................................................................................9

TIM Goals and Objectives.....................................................................................................................................................9

Chapter 2. Definitions ........................................................................................................................... 12

Cost Recovery.........................................................................................................................................................................12

Cost Management.................................................................................................................................................................12

Identifying and Classifying Costs....................................................................................................................................13

Performance Measurement...............................................................................................................................................15

Chapter 3. State of the Practice............................................................................................................ 20

Legislation .............................................................................................................................................................................20

Advocacy Groups on TIM Cost Recovery .....................................................................................................................23

Fire Services and EMS ..........................................................................................................................................................23

Law Enforcement Agencies...............................................................................................................................................26

Transportation Agencies....................................................................................................................................................27

Chapter 4. Translating Cost Management Principles into TIM Practice.......................................... 32

Roadmap for Managing TIM Costs..................................................................................................................................32

Contracting Emergency Services................................................................................................................................... 40

Chapter 5. Strategies for Recovering TIM Costs ................................................................................. 42

Legislation .............................................................................................................................................................................43

Public-Private Partnerships................................................................................................................................................43

Special Federal Programs.................................................................................................................................................. 44

Chapter 6. Planning for Operations..................................................................................................... 48

Integrating TIM into Metropolitan and Statewide Transportation Plans..........................................................49

Inclusion of TIM Projects or Programs in the Transportation Improvement Program (TIP).......................51

Creating Local Line Items...................................................................................................................................................52

Chapter 7. Closing Thoughts ............................................................................................................... 54

Continue to Make the Case for TIM................................................................................................................................ 54

Conduct Pilot Projects.........................................................................................................................................................55

Dissemination of Research and Lessons Learned Information.............................................................................56

Additional Research .............................................................................................................................................................56
iii

List of Fi gures

Figure 1 – Emergency Transportation Operations Continuum....................................................................................3

Figure 2 – Full Spectrum of TIM Costs ..................................................................................................................................6

Figure 3 – Cost Management Fundamentals....................................................................................................................12

Figure 4 – Standard Incident Timeline for Performance Measurement..................................................................15

Figure 5 – Sources that may enable TIM cost recovery statutes............................................................................... 20

Figure 6 – Comprehensive Environmental Response, Compensation, and Liability Act of 1980 

(As Amended in 1986)...........................................................................................................................................21

Figure 7 – Example of Cost Tracking Tool at the Florida Highway Patrol............................................................... 26

Figure 8 – Sample of Cost Tracking ..................................................................................................................................... 28

Figure 9 – Alabama Law for Highway Damage Liability ............................................................................................. 29

Figure 10 – California Emergency Response Law .......................................................................................................... 30

Figure 11 – Broad Picture of TIM Cost Management Components ......................................................................... 32

Figure 12 – Example of Resource Allocation and Utilization Process in Asset Management......................... 34

Figure 13 – Transportation Resource Management ...................................................................................................... 36

Figure 14 – Screen 1 of the Pennsylvania Incident 

Cost Management System................................................................................................................................ 37

Figure 15 – Screen 2 of the Pennsylvania Incident Cost Management System................................................... 38

Figure 16 – Screen 3 of the Pennsylvania Incident Cost Management System................................................... 38

Figure 17 – Screen 1 of the Pennsylvania Cost Recovery Tracking System ........................................................... 42

Figure 18 – Screen 2 of the Pennsylvania Cost Recovery Tracking System........................................................... 43

Figure 19 – The Transportation Planning Process.......................................................................................................... 50
iv

List of Tables

Table 1 – National Incident Estimates by Year, 2005-2010..............................................................................................6

Table 2 – The Anatomy of a TIM Program.............................................................................................................................8

Table 3 – Sources of Costs Associated with the National Unified Goal 

for Traffic Incident Management........................................................................................................................10

Table 4 – Input, Output, and Potential Outcome for a TIM Program by NUG Strategy .....................................16

Table 5 – Viewpoints on TIM Cost Recovery by Means of User Fees....................................................................... 23

Table 6 – Roadmap to a TIM Cost Management Program........................................................................................... 33
v

List of Abbre viations

AASHTO American Association of State Highway and Transportation Officials

ABC Activity-Based Costing 

Cal-B/C California Life-Cycle Benefit/Cost Analysis Model

CERCLA Comprehensive Environmental Response, Compensation, and Liability Act

CHART Coordinated Highway Action Response Team

CMAQ Congestion Mitigation and Air Quality

CMP Congestion Management Pricing

CPM Collaborative Performance Management

DOT Department of Transportation

DUI Driving Under the Influence

EMS Emergency Medical Services

ER Emergency Relief

ETO Emergency Transportation Operations

FEMA Federal Emergency Management Administration

FHWA Federal Highway Administration

FIRE Firefighter Investment and Response Enhancement

GES General Estimates System

HOT High Occupancy Toll

HSIP Highway Safety Improvement Program

IDAS ITS Deployment Analysis System

ITS Intelligent Transportation Systems

MPO Metropolitan Planning Organization

MTP Metropolitan Transportation Plan

NHS National Highway System

NHTSA National Highway Traffic Safety Administration

NRF National Response Framework

NTIMC National Traffic Incident Management Coalition

NUG National Unified Goal

PennDOT Pennsylvania Department of Transportation

SAFER Staffing for Adequate Fire and Emergency Response

SAS Statistical Analysis Systems

SDDOT South Dakota Department of Transportation

SHSP Strategic Highway Safety Plan

STP Surface Transportation Program

TIM Traffic Incident Management

TIP Transportation Improvement Program

TMA Transportation Management Area

TMC Traffic Management Center

TSM Transportation System Management

USDOT United States Department of Transportation

 USFA U.S. Fire Administration
Credit: iStockphoto Credit: iStockphoto Credit: iStockphoto
2

INTRODUCTION

This publication provides mid-level managers at transportation and other stakeholder agencies 

with the resources they need to explain the benefits of traffic incident management (TIM) and 

TIM cost management and cost recovery to executive leadership. It also provides the same midlevel managers with information that will help them implement TIM cost management and cost 

recovery techniques. This document focuses on “recoverable costs” related to TIM, as there are 

costs associated with TIM that cannot accurately be measured or replaced; however, costs related to 

responder and motorist injury, disability, fatality, and the related medical and societal costs are not 

addressed here as those issues are addressed in a variety of ways in the existing literature. Costs are 

classified as being recovered when the program receives full or partial reimbursement from sources 

outside of the budget. Once costs are recovered, they can pay back the originator or be reinvested 

for future activity. Costs can be recovered from responsible parties (e.g., insurers, property owners), 

from associated or interested third parties (e.g., government grants for specific activities), or in the 

form of payment for service (e.g., incentives based on time or effort). 

Through numerous discussions with local and State TIM practitioners and a global scan of the issues 

impacting effective TIM operations throughout the Nation, the Federal Highway Administration 

(FHWA) recently identified TIM cost management and cost recovery as emerging issues for 

transportation, law enforcement, and fire agencies engaged in planning for and implementing TIM 

operations in their communities and regions. As transportation operations, and more specifically 

TIM, become a more mature part of transportation agency services, jurisdictions must understand 

the true cost of responding to traffic incidents and identify ways to offset or recoup these recurring 

costs. FHWA presents this document as a contribution to the sparse body of knowledge on the 

topic and provides a vision towards which transportation agencies can begin to work as TIM 

programs become a transportation agency mainstay. The scope of this document is limited to costs 

directly associated with incident mitigation. Costs associated with responder injuries and longterm health care needs due to traffic incidents are not considered.

The September 2010 FHWA publication “Best Practices in Traffic Incident Management” described 

TIM as “a planned and coordinated program to detect and remove incidents and restore traffic 

capacity as safely and as quickly as possible.”1

 When discussing what strategies can be employed 

by agencies to manage costs related to TIM, planning is a key aspect. It is the factor that makes it 

possible for agencies to identify opportunities to recover a portion of the total cost of providing 

TIM services.

But before one can understand how the costs associated with TIM affect an agency, one must be 

familiar with both the fundamentals of what constitutes a TIM program as well as the more intricate 

details of what makes a TIM program effective.

For those readers lacking a comprehensive understanding of the elements of a successful TIM 

program, the following documents provide useful background information for both TIM and cost 

management/cost recovery: 

•	 Best Practices in Traffic Incident Management

•	 2010 Traffic Incident Management Handbook

•	 Planned Special Events: Cost Management and Cost Recovery Primer

•	 National Unified Goal for Traffic Incident Management

•	 Traffic Incident Management Self Assessment

A complete library of TIM and other operations-focused publications is available at 

http://ops.fhwa.dot.gov/publications/publications.htm. 

1 FHWA, Best Practices in Traffic Incident Management, FHWA-HOP-10-050 (Washington, DC: September 2010), p. 2.
3

As this document examines the TIM cost elements that may be managed and recovered, the reader 

should be comfortable with the premise that traffic incident management is a new public safety 

discipline wherein traditional first responders work with transportation elements to respond on the 

Nation’s roadways. Moreover, TIM is one of a series of emergency transportation operations (ETO) 

events. This linkage is important because, as the National Response Framework (NRF) indicates, a 

traffic incident can escalate into a disaster, a widespread emergency, or other significant event.2 As 

Figure 1 shows, a traffic incident is the most probable and most frequent ETO event that occurs. 

Compared with the other events the chart depicts, traffic incidents tend to be the least severe.

It is important to recognize that a TIM event is an ETO event because as more events occur that 

require coordinated response and recovery efforts, exercising and planning for TIM can become a 

way of preparing responders for larger ETO events, and this practice can extend to managing and 

recovering the associated costs. This document does not suggest that the capability of an agency 

either to manage or recover costs associated with TIM should be an indicator of whether the service 

is beneficial, but rather that a better understanding will help mid-level managers at transportation 

agencies understand the effect that TIM is having on the agency and help them demonstrate the 

effectiveness of their programs.

Planning for operations provides a foundation for explicitly developing TIM goals, objectives, 

strategies, processes, and opportunities for integration with broader regional operations and 

safety initiatives. Through these activities planners and operators will have a better starting point 

for estimating and evaluating TIM cost implication (capital, operational, and support) and revenue 

options. 

Cost management and recovery for planned special events is addressed under separate cover in the 

Planned Special Events: Cost Management and Cost Recovery Primer, May 2009 on the FHWA Office 

of Operations website at http://ops.fhwa.dot.gov/publications/publications.htm.

2 Federal Emergency Management Administration, “NRF Resource Center” web page, accessed November 2011. Available 

at: http://www.fema.gov/emergency/nrf/

Figure 1 – Emergency Transportation Operations Continuum

Trac Incidents

Planned Special 

Events

HAZMAT 

Incidents

Wildres

Major Storms

Malevolent Acts

PROBABILITY

Trac 

Incidents

Local 

Disasters

Major Regional 

Events

Catastrophic 

Events

Malevolent 

Acts

Evacuations

EVENT SEVERITY
4

Organization

The arrangement of this document provides the reader with a clear understanding of what must 

be done to manage and recover costs associated with TIM. Chapter 1 presents and summarizes 

the fundamentals of TIM so that the affects that costs have on these activities can be linked. As 

discussed on the previous page, this publication is not intended to re-create the content from 

previous publications; however, some explanation is necessary for the reader to understand the 

context in which the document addresses TIM costs. 

Chapter 1 - Presents and summarizes the fundamentals of TIM so that the effects that costs have on 

these activities can be linked. As discussed on the previous page, this publication is not intended 

to re-create the content from previous publications; however, some explanation is necessary for the 

reader to understand the context in which the document addresses TIM costs operations. 

Chapter 2 - Contains information about the fundamentals of cost management and cost recovery. 

Many types of businesses use these fundamentals, and by examining some of them the reader may 

begin to identify TIM implementation strategies. 

Chapter 3 - Defines the state of the practice and shows that, for the most part, the cost aspects of 

TIM that are managed and recovered are tactical. 

Chapters 4 and 5 - Shows the reader how to take advantage of opportunities to manage and 

recover TIM costs.

Chapter 6 - Examines the topic of planning for operations. Understanding the role that TIM 

plays in planning for operations is important because reinforcing this link is a primary objective 

of mainstreaming transportation operations as a whole. The goal of this chapter is to provide 

information that will allow TIM cost management and recovery to move beyond the tactical level. 

The information provided will provide mid-level managers with the knowledge needed to define 

a process within their own agencies that demonstrates a more complete return on investment in 

transportation operations, including TIM. It will also allow them to identify ways to offset the costs 

of TIM by understanding the costs for strategic and support activities associated with TIM. 

Chapter 7 - Recognizes that the conversation on how to pay for the recurring costs of TIM and 

transportation operations is just beginning. This chapter provides additional topics that should be 

discussed and researched to take the next step in TIM cost management and cost recovery.

Challenges/Issues

Transportation and TIM responder agencies can face many challenges in responding to incidents 

and crashes on our Nation’s roadways, most notably shrinking budgets and the need to maintain 

an aging infrastructure. Traffic incidents are a significant issue affecting both safety and mobility 

on our roadways; while quantifying the total impact to society is not possible given current data 

availability, we may be able to draw some conclusions on the scope of the problem extrapolating 

smaller datasets.

Economic future shrinking budgets 

The United States struggles with an economy that is only now coming out of a recession, and its 

future remains uncertain. According to the National Association of State Budget Officers, general 

fund spending among the States remains $18.7 billion, or 2.7 percent below peak fiscal 2008 

levels.3 Fiscal Year 2011 general fund spending saw a decline of 6.3 percent from peak 2008 levels. 

Balanced budget laws, in effect in most States, require State agencies to cut programs and services 

to offset decreased revenues and funding. As a result, State and local programs will come under 

increased scrutiny, and program managers will need to justify funding for each program through 

3 National Governors Association and the National Association of State Budget Officers. The Fiscal Survey of States. 

Washington D.C. 2011. http://nasbo.org/LinkClick.aspx?fileticket=yNV8Jv3X7Is%3d&tabid=38
5

performance measurement data and cost-benefit analyses. While this document does not provide a 

cost-benefit analysis process for TIM, it does begin to address the need to institutionalize the way TIM 

costs are tracked. Only after a method and data are in place will cost-benefit analyses be possible. 

State budget cuts affect all first response agencies and entities, which in turn are likely to limit 

responders’ ability to provide an appropriate level of response to traffic incidents across the Nation.

Cost-benefit analyses, when complete and appropriate, may be used effectively to help address the 

realities of the battle for sustained, increased, or new funding for TIM efforts.

TIM continues to be an issue that impacts livability in communities

According the National Highway Traffic Safety Administration’s (NHTSA) General Estimates System 

(GES), the number of Reported Motor Vehicle Crashes in 2010 totaled 5,419,000. While many 

sources suggest that only half of all motor vehicle crashes are reported, typically only those crashes 

that are reported require a coordinated response and, therefore, result in the expenditure of 

responder agency resources. Of reported crashes in 2010, 30,196 resulted in fatalities and 1,542,000 

included injuries. Each of these fatal and injury crashes resulted in a major incident on the roadway 

that required a significant level of response—at a minimum police, fire/rescue, and likely towing. 

But crashes account for only part of the problem. Breakdowns, debris, and other on-road events 

create a need for on-scene response to return the roadway to normal operations. Calculating the 

number of non-crash incidents across the United States or for any particular State is not feasible 

with the current data collection systems and priorities. 

Table 1 shows the result of the extrapolation of the crash to disabled vehicle ratio applied to 

estimated crash rates from 2005 to 2010. As a substitute for actual data, a sample set of data 

from the Maryland Coordinated Highway Action Response Team (CHART) program was used to 

extrapolate an estimate of non crash related incidents per year. For example in 2010 the CHART 

program recorded 19,309 emergency response incidents, or crashes; CHART data also indicated 

29,699 disabled vehicle responses. The ratio between these data points (1/1.538) was applied to 

the GES crash estimates for the entire nation, resulting in 8,334,915 disabled vehicle responses and 

13,753,915 total incidents needing response across the country in 2010. This extrapolation was 

also performed for the years 2005 through 2009, with results indicated below. Many incidents 

and disabled vehicles go unreported, therefore this estimate is likely below the actual number of 

incidents occurring on roadways each year.

It is important to note that while there may not be cost recovery opportunities for all disabled 

vehicle incidents, that there is a real cost in any response necessary. The intent of the table below is 

to quantify the scope of the TIM issue on a national level.
6

Table 1 – National Incident Estimates by Year, 2005-2010

Year Crashes Disabled Vehicles Total Incidents

2005 6,159,000 6,208,836 12,367,836

2006 5,973,000 6,521,364 12,494,364

2007 6,024,000 5,981,166 12,005,166

2008 5,811,000 9,318,167 15,129,167

2009 5,505,000 7,464,019 12,969,019

2010 5,419,000 8,334,915 13,753,915

Sources: National Highway Traffic Safety Administration, General Estimate System 

(Crashes); CHART 2010 Data (Disabled Vehicles extrapolated to national estimates).

The Cost of Traffic Incidents

If TIM cost management and cost recovery are to become important to an agency, then it is 

important to understand exactly what the costs associated with TIM are. 

The full spectrum of TIM costs also include strategic 

and support costs that need to be considered 

during cost management and recovery. Items such 

as medical costs, court costs and fines, increased 

insurance costs, and societal costs due to lost 

time and revenue due to delay impact the overall 

cost equation. Those types of costs are important 

to acknowledge as the focus shifts from cost 

management and cost recovery to developing 

benefit-cost ratios. In addition to incorporating the 

full range of tactical costs, strategic and support 

costs must also be added to realize the full cost of 

TIM. Collecting all information across the full cost 

spectrum shown in Figure 2 will allow agencies to 

understand the cost of TIM and, ultimately, allow for 

the partial or whole recovery of costs. Figure 2 – Full Spectrum of TIM Costs 

Tactical

Costs

Strategic

Costs

Supportive

Costs
Credit: iStockphoto Credit: iStockphoto Credit: iStockphoto
8

Chapter 1. TIM Over vie w

TIM consists of a planned and coordinated multi-disciplinary process to detect, respond to, and 

clear traffic incidents so that traffic flow may be restored as safely and quickly as possible. Effective 

TIM reduces the duration and impacts of traffic incidents and improves the safety of motorists, 

crash victims and emergency responders. A “good” TIM program is one in which responders go 

home every time, roadways are blocked for the minimum amount of time, and secondary crashes 

are reduced or eliminated. Sometimes TIM is used interchangeably with the term “transportation 

operations” or “traffic operations”; however, at a transportation agency, TIM is just one component 

of an overall transportation operations program or may even be part of the maintenance division. 

From a national perspective, TIM consists of four primary areas: legislation, policies, training, and 

outreach. 

Regardless of where the responsibility for TIM lies within transportation agencies, operations 

managers increasingly look upon TIM as a transportation operations solution that promotes more 

efficient use of the existing roadway infrastructure. However, at agencies that are asked to assume 

the responsibilities of TIM costs, reduced funding levels continue to limit their ability to execute 

programs effectively.

TIM Programs can typically be divided into strategic activities, tactical activities, and support 

activities, as shown in Table 2 below.

Table 2 – The Anatomy of a TIM Program

TIM Strategic Activities TIM Tactical Activities TIM Support Activities

•	 Staffing/Resourcing

•	 TIM Teams

•	 Policies and Procedures

•	 Training

•	 Vehicle Purchases

•	 System Deployment

•	 Software Deployment

•	 Asset Purchases

•	 Asset Typing

•	 Resource Typing

•	 Strategic Planning

•	 Agency Notification

•	 Resource Dispatch

•	 Scene Setup

•	 Device Activations

•	 Traffic Diversions

•	 Queue Monitoring

•	 Investigative Procedures

•	 Victim Extrication and 

transport

•	 Vehicle Clearance 

•	 HAZMAT Mitigation

•	 Vehicle/Equipment Repairs

•	 Traffic Management Center 

Operations

•	 Infrastructure Repairs 

•	 Data Collection

•	 Data Integration

•	 Data Sharing

•	 Traveler Information

•	 After Action Reviews

•	 Cost Management

•	 Cost Recovery
9

TIM Programs

An effective TIM program cannot be planned or executed by any single agency or discipline alone. 

This understanding led to the creation of goals and objectives through the National Unified Goal 

(NUG), developed by FHWA, AASHTO, the National Traffic Incident Management Coalition (NTIMC), 

and other Government and industry representatives in 2004. 

TIM Goals and Objectives

IM program goals and objectives as documented in the NUG include three overarching goals:

•	 Responder Safety

•	 Safe, Quick Clearance

•	 Prompt, Reliable Interoperable Communications

Each of these goals is supported by cross-cutting strategies or objectives that help to define 

strategic, tactical, and supporting actions for TIM programs. Table 3 below shows each of the NUG 

cross-cutting strategies along with considerations for cost management and cost recovery. This 

examination of the NUG shows that there are many opportunities to manage and possibly recover 

the costs associated with TIM, and relating these expenses to performance during incidents can 

better capture the full scope of strategic costs. The key to an effective TIM cost management and cost 

recovery program is tying these goals to performance measures and an overall performance index.
10

Table 3 – Sources of Costs Associated with the National Unified Goal for Traffic Incident Management

TIM Cost Categories

Strategy Plans and 

Procedures

Coordination Equipment Technology Training

TIM Partnerships and 

Programs   

Multidisciplinary NIMS 

and TIM Training   

Goals for Performance 

and Progress    

TIM Technology    

Effective TIM Policies   

Awareness and Education 

Partnerships   

Recommended Practices 

for Responder Safety    

Move Over/Slow Down 

Laws    

Driver Training and 

Awareness  

Multidisciplinary TIM 

Procedures     

Multidisciplinary 

Communications 

Practices and Procedures

    

Response and Clearance 

Time Goals  

24/7 Availability   

Prompt, Reliable 

Responder Notification     

Interoperable Voice and 

Data Networks     

Broadband Emergency 

Communications Systems     

Prompt, Reliable Traveler 

Information Systems     

Partnerships with News 

Media and Information 

Providers

   

This examination of the NUG shows that there are many opportunities to manage and possibly 

recover the costs associated with TIM. The key to an effective TIM cost management and cost 

recovery program is tying these goals to performance measures and an overall performance index.
Credit: iStockphoto Credit: iStockphoto Credit: iStockphoto
12

Chapter 2. Definitions

Cost Recovery

Costs are classified as being recovered when the program receives reimbursement from sources 

outside of the budget that is then used to fund the program. Understanding the difference 

between cost recovery and cost substitution is a key consideration. Cost substitution is simply 

replacing a portion of the budget used for incident response from another source within the 

same budget, for example moving funds between state agencies. Cost recovery would involve 

sources outside the Governors budget purview, such as costs recovered from federal grant sources, 

metropolitan planning organizations, or private interests.

Cost Management

Cost management allows us to view the cost-benefit relationship of various activities, setting the 

stage for more informed decisions. Cost management generally begins with an initial plan for costs, 

continues through cost tracking and analysis of the information collected, and includes evaluations 

and decisions based on information from the previous stages. 

The four distinct stages described above are depicted in Figure 3. All of the stages are 

interdependent, and decisions in any stage will affect the system as a whole. The system is a closed 

loop, so the last stage leads back to the first stage. The four stages are described below.

•	 Cost Planning is simply estimating future costs and budgeting. Budgets are based on knowledge

about historic costs that has been gained in large part from good tracking and analysis. Budgets

for new activities or expansions may include detailed analysis of a capital purchase (e.g., equipment,

software). 

•	 Cost Tracking involves coding discrete activities and their associated costs or cost drivers, such as

personnel time sheets, vehicle mileage logs, supplies purchases, and contract payments.

•	 Cost Analysis requires cost data processing to create cost information—information that will be

useful in evaluation, decisionmaking, and planning. Analysis can produce any of a wide variety of

measures across a number of dimensions, including time trends, percentages, and per-unit measures. 

Examples of static, per-unit measures include agency employee hours per incident and labor cost

per incident. Examples of temporal analysis measures include trends in labor rates and trends in fuel

costs. Examples of percentage measures include labor cost and fuel cost as a percentage of total

operating costs. 

•	 Evaluation and Decision. Cost

information produced in the analysis stage

is evaluated to support decisionmaking for

future programming, resource allocations,

and asset management; to support cost

recovery mechanisms; and to support

appeals to higher level decisionmakers for

continued or enhanced funding. Subsequent

chapters address these elements.

Figure 3 – Cost Management Fundamentals

COST PLANNING

COSTANALYSIS

EVALUATION&DECISIO

N

COSTTRACKING
13

A sound cost analysis approach can be a useful tool for performance management, revealing 

both ways to achieve a more cost-effect level of performance as well as opportunities to improve 

performance (e.g., incident clearance time) without increasing cost. Agencies may use a variety of 

cost analysis approaches, one of which is activity-based costing (ABC). ABC first became popular 

in the late 1980s in the manufacturing sector, eventually becoming of interest to financial and 

governmental sectors in the 1990s. ABC focuses on discrete processes (activities) and their specific 

costs, attempting to allocate both direct and indirect costs based on carefully determined process 

cost drivers. That is, ABC defines “cause and effect” relationships to assign costs objectively. The 

method can be particularly helpful in revealing “true” costs in instances where there is a great deal 

of indirect cost sharing (e.g., equipment with multiple uses). 

The South Dakota Department of Transportation (SDDOT) implemented an ABC system 

as one component of a comprehensive management performance program known as 

“Collaborative Performance Management” (CPM). CPM helps the department run its 

operations “like a business.” The agency credits CPM with significant improvements in 

performance, including millions of dollars of savings annually. One benefit of the CPM 

SDDOT managers have cost and other performance information at their fingertips. They 

use this business intelligence to reduce the cost of processes, lower the lifetime cost of 

ownership and operation of specific assets, monitor the effectiveness of the department’s 

transportation services, maintain the knowledge base as senior staff retire, and prepare 

performance-based business plans and budgets. Says Roxanne Rice, Fiscal and Public 

Assistance Director of SDDOT, “We are able to show our stakeholders how we are doing, 

what we are doing, why we are doing it and what it costs the taxpayer.” 4

Identifying and Classifying Costs

Costs may be classified several ways. Costs can be either fixed, variable, or “mixed” (“semivariable”). Another way to break down costs is into the “direct” or “indirect” categories. 

The classification scheme an agency uses will depend on the type of analysis, planning, or 

decisionmaking the agency is performing. 

•	 Fixed costs are costs that typically do not change (in total) in response to changes in volume of

activity. Examples include depreciation, supervisory salaries, and maintenance expenses. In reality,

such cost elements may change with a change in the scale of the activity, although this would not

typically occur in a 1-year analysis period. In microeconomics, a fixed cost (e.g., rent) is one that

cannot be varied in the short run. 

•	 Variable costs are costs that change in response to the changes in the volume of activity. We

generally assume that the relationship between variable costs and activity is proportional. For

example, if the volume of activity increases by 10 percent, then variable costs in total would be

expected to rise by 10 percent. The labor cost of employees responding on the scene of an incident

would be a variable cost that increases with the number of incidents.

•	 Mixed (or “semi-variable”) costs are costs that contain both a variable cost element and a fixed

cost element. An example is a vehicle rental that is billed at a base rate plus a per-mile charge.

4 SAS, “Extending the Power of Cost Management in Government,” White Paper available online at

http://www.sas.com/resources/whitepaper/wp_3573.pdf
14

The other common classification scheme for costs is direct versus indirect costs. Direct costs 

are costs that can be easily and readily linked to a specific activity, while indirect costs are those 

that cannot easily be linked to a single specific function or objective. The cost associated with 

setting up and operating a traffic management center is an example of indirect costs because 

the management center serves several functions, one of which is incident management. Other 

examples of indirect costs are the costs of supervisory staff, administrative support staff, and 

administrative support facilities.

Tracking direct costs is usually a straightforward process. It is in the tracking and allocation of 

indirect costs that agencies typically have most room for improvement. In some cases, indirect 

costs might not be allocated to some activities at all. In others, they may be allocated based on 

some rule of thumb that does not accurately capture the true linkages between the resource 

use and the activity. Proper tracking and allocation of direct and indirect costs is particularly 

important and difficult in the case where TIM functions are not housed in a dedicated department 

but rather are conducted and budgeted within a broader agency department or division, such as 

maintenance or ITS. In such situations, an ABC system offers the opportunity to provide improved 

cost information and promote more well-informed decisions about resource allocation. 

In an activity-based cost system, the focus of interest is on the activities performed by a business or 

agency. For example, one activity associated with TIM is operating dynamic message boards. The 

ownership cost of the equipment (maintenance, communication costs and deprecation of the signs 

and the software) is a cost that should be divided among the various operations elements that use 

the signs, including construction and special events as well as incident management. In an ABC 

system, analysts first identify the cost driver for the activity. The cost driver is the unit of measure 

that most correlates with the resource cost of the activity. For dynamic message signing, the 

cost driver might be staff time at the traffic management center. In such a case, the indirect costs 

of the dynamic message signing activity would be allocated to the “cost objective” (i.e., incident 

management, construction work zone management, planned special events management) in 

proportion to the staff hours spent addressing each of these functions at the TMC. An alternative 

method of applying the cost driver is using the proportion of total time that the equipment is in use 

in the service of each of the activities’ cost objectives. In the case of the signage, however, it may 

be more appropriate to keep the indirect costs broken down; software costs may correlate best 

with staff hours of application, while the signs themselves may correlate best with hours in use. In 

setting up an ABC system, designers will face the tradeoff of the costs of creating more detailed 

information like that described above to the benefits of better-informed decisionmaking. In fact, 

the chief criticism of ABC systems is that they can be costly to implement. In any case, managers 

may still improve cost management by applying some of the principles of activity-based costing, 

even if the agency does not choose to undertake the full implementation of an ABC system.

The U.S. Marine Corps implemented an Activity Based Costing system, using proprietary 

software from SAS, starting in 2000. Its aim was to determine the true costs of the services 

each based provided, to identify ways to increase efficiency and reduce costs. The ABC 

system saved the Marines about $89 million from 2000 to 2002, said Maj. Rod Brewster of the 

Marines’ Center for Business Excellence at the Navy Annex in Arlington, Virginia. The Marine 

Corps’ goal was ultimately to reduce the operating expenses of its bases by $634 million.5

5 Washington Technology, “SAS helps Marine Corps budgets get lean: activity-based costing software offers enterprise-wide 

visibility,” February 24, 2003. Available online at 

http://goliath.ecnext.com/coms2/gi_0198-49918/SAS-helps-Marine-Corps-budgets.html
15

Performance Measurement

Performance monitoring and measurement are critical in today’s transportation agencies, and 

this monitoring extends to traffic incident management. A great deal of the focus of performance 

measurement for TIM is related to the incident timeline, as shown in Figure 4.

By examining the project delivery process as shown in Figure 12 of this document, an agency can 

make the connection between the timeline from Figure 4 to a TIM program.

With so much focus on implementing the NUG in TIM programs it is also useful to understand 

how each strategy from the NUG can be measured. The inputs, outputs, and outcome-based 

performance measures from the NUG are shown on the following pages.

It is important that the measurement of performance in each area of response activity is connected 

to the financial needs of any agency involved in that response. The study, implementation, and 

review of each activity have a cost. Some of the potential outcomes listed in Table 4 are associated 

with customer satisfaction and public perceptions and are therefore challenging to quantify. A 

more complete understanding of TIM activities from planning to preparedness to operation to 

measurement empowers analysts to make real budgetary decisions.

Figure 4 – Standard Incident Timeline for Performance Measurement

Incident 

Verication is 

Complete

Respond

Incident is 

Reported

Incident

Occurs

Response 

Dispatch

Incident is 

Cleared

Trac Returns 

to Normal 

Conditions

Recover

INCIDENT TIMELINE
16

NUG Strategy Input Output Potential Outcome for a TIM Program

TIM partners at the national, State, regional and local levels should work together to promote, develop, and sustain effective TIM Programs.

•	 Written agreements•	 Program definition

•	 Training requirements•	 Meetings

•	 Customer satisfaction increased•	 Negative public perception 

decreased

•	 Executive acceptance

TIM responders should receive multidisciplinary NIMS and TIM training. •	 Number of personnel to be trained

•	 Frequency of training

•	 Percentage of personnel trained•	 Increased efficiency in incident 

verification

•	 Increased fiscal responsibility for 

dispatched services 

•	 Improved communications and 

scene management

TIM partners should work together to establish and implement performance goals at the State, regional and local levels for increasing the effectiveness of TIM, including methods for measuring and monitoring progress.

•	 High level tasks•	 Data-driven tasks•	 Efficiency tasks

•	 Measures of performance at all 

levels of program

•	 Increased or decreased funding•	 Improved data for analysis•	 System, protocol, procedure needs, 

and verification

TIM partners at the national, state, regional and local levels should work together for rapid and coordinated implementation of beneficial new technologies for TIM.

•	 Concept of Operations•	 Architectures•	 Stakeholder needs

•	 Number of incidents responded 

to

•	 Efficiency of response•	 Reduced incident response 

timeline

•	 Right-sized TMCs•	 Increased efficiencies for 

interagency communication and coordination

•	 Increased funding

TIM partners at the national, state, regional and local levels should join together to raise awareness regarding proposed policies and legislation that affect achievement of the NUG objectives of Responder Safety; Safe, Quick Clearance; and Prompt, Reliable Traffic Incident Communications.

•	 Responder safety statistics•	 Incident duration statistics•	 Communication protocol 

architectures (human and system) 

•	 Number of responders injured 

responding to traffic incidents

•	 Time to identify, verify, dispatch, 

clear, and return traveling conditions to normal

•	 Protocols for real-time 

communications

•	 Increased customer satisfaction•	 Changes in responder safety 

protocols

•	 Memorandums of understanding

Broad partnerships should be developed to promote public awareness and education regarding the public's role in safe, efficient resolution of incidents on the roadways.

•	 Benchmark of customer 

satisfaction

•	 Percentage of customer 

satisfaction

•	 Increase in customer knowledge 

based on marketing principles

•	 Improved public perception of the 

DOT

•	 Reduced customer complaints•	 Responder safety campaigns•	 Quick clearance campaigns

Table 4 – Input, Output, and Potential Outcome for a TIM Program by NUG Strategy
17

NUG Strategy Input Output Potential Outcome for a TIM Program

Recommended practices for TIM Responder Safety and for traffic control at incident scenes should be developed, and widely published, distributed and adopted.

•	 Existing status of TIM responder 

practices

•	 National best practices

•	 Responder manuals•	 Standard drawings for incident 

scenes

•	 Reduced infrastructure costs•	 Reduced responder fatalities, 

injuries, and asset damage

•	 Benefits paid due to fatalities and 

injuries are reduced

Drivers should be required to Move Over/Slow Down when approaching traffic incident response vehicles and traffic incident responders on the roadway.

•	 Laws•	 Standards for delineation

•	 Reduced shoulder collisions•	 Reduced rate of vehicle to 

responder collisions

•	 Improved safety of freeway service 

patrol and police responders

Driver training and awareness programs should teach drivers how to react to emergencies on the roadway in order to prevent secondary incidents, including traffic incident responder injuries and deaths.

•	 Revised driver training curriculum•	 Secondary incident rates

•	 Reduction in incident durations•	 Reduction in queues and back 

logs

•	 Increased driver awareness 

reducing program costs

TIM partners at the state, regional and local levels should develop and adopt multidisciplinary procedures for coordination of TIM operations, based on national recommended practices and procedures.

•	 Stakeholder agreements•	 National bench marks

•	 More efficient coordination•	 Meetings 

•	 Cost sharing among agencies•	 Better overall use of State resources

TIM partners at the state, regional and local levels should commit to achievement of goals for traffic incident response and clearance times (as a component of broader goals for more effective TIM, see Strategy 3).

•	 Incident timeline milestones and 

duration goals

•	 Stakeholder agreements

•	 Actual incident milestone 

durations

•	 Task durations

•	 Measured success and direct 

evidence of resources in use positive outcomes

Traffic incident responders and resources should be available 24/7.

•	 Hours of operations•	 Resource types

•	 Money spent on resource 

availability

•	 Resource area of responsibility 

and coverage

•	 Increased customer satisfaction 

and reduced costs of mobility

•	 Determination of staffing and 

resource levels as they tie directly to customer service
18

NUG Strategy Input Output Potential Outcome for a TIM Program

Traffic incident responders should develop and implement standardized multidisciplinary traffic incident communications practices and procedures.

•	 Communication types•	 Reliability•	 Policies and procedures

•	 Training opportunities•	 Enhanced protocols•	 Communication inventories

•	 Systems and protocols that reduce 

the amount of lost time

•	 Maintaining current and efficient 

communication devices

All traffic incident responders should receive prompt, reliable notification of incidents to which they are expected to respond.

•	 Notification time latency•	 Notification accuracy•	 Stakeholder identification

•	 Percentage of time notification is 

beyond the notification goal

•	 Percentage of time notifications 

(inbound and outbound) are accurate

•	 Stakeholder satisfaction

•	 Systems and/or protocols to speed 

up notifications and enhance the accuracy of notifications

•	 Stakeholder relationships can be 

improved

•	 Resources can be used more 

efficiently

State, regional and local TIM stakeholders should work together to develop interoperable voice and data networks.

•	 Voice and data architectures from 

each stakeholder agency

•	 Multiagency voice and data 

architecture

•	 Appropriate technologies can be 

instituted to maintain or enhance communications

•	 Less lost time when new 

technologies are implemented

National TIM stakeholders (working through the NTIMC) should work together to reduce the barriers to integrated broadband emergency communications systems development and integration (both wired and wireless). 

•	 Communication barriers•	 Communication costs•	 National comparisons•	 Relationship with the NTIMC

•	 Communication plan•	 Percentage of communications 

below national standards

•	 Gaps in communication

•	 Communication benchmarks•	 Identification of overarching 

communication needs

•	 Implementation of 

communications to reduce lost time

TIM partners should encourage development of more prompt and reliable traveler information systems that will enable drivers to make travel decisions to reduce the impacts of emergency incidents on traffic flow.

•	 Customer satisfaction•	 Traveler information portals•	 Traveler information statistics 

•	 Customer satisfaction with 

traveler information system and the aspects that support it

•	 Implementation of additional 

traveler information services and cancellations of ones that are not effective

•	 Refined protocols

TIM partners should actively partner with news media and information service providers to provide prompt, reliable incident information to the public.

•	 Stakeholder group identification•	 Customer satisfaction

•	 Public-Private partnerships •	 Favorable reporting by media 

partners

•	 Greater recognition of DOT Traffic 

Operations in promoting mobility

•	 Reduced recurring congestion levels
Credit: iStockphoto Credit: iStockphoto Credit: iStockphoto
20

Chapter 3. State of the Practice

The high profile development of the NUG for TIM and the subsequent outreach efforts by the 

National Traffic Incident Management Coalition (NTIMC), the FHWA as well as other agencies, 

associations, and organizations has led to a renewed and intensified focus on TIM. Increased 

attention has particularly focused on promoting best practices to improve responder safety, 

promoting safe quick clearance policies and legislation, and improving the interoperability of 

incident communications and performance measurement. However, to date efforts to promote 

best practices and discussions about performance measurement have not identified long-term 

funding streams that agencies may use to pay for services. 

To understand the state of the practice with regard to funding TIM programs, the study team 

conducted an extensive search for and evaluation of documents available in the public domain. 

This evaluation documents the legislation related to TIM cost recovery, advocacy group positions, 

and how individual TIM disciplines approach funding for TIM. The search yielded valuable 

information upon which to base the synthesis of current suggested or implemented practices.

Overall, the study team identified and reviewed 39 documents to determine their applicability and 

gather any relevant follow-up documentation or specific practices deemed worthy of replication. The 

majority of published material dealt with the topic of cost recovery, which was typically described:

•	 As it applies to infrastructure damage repair costs;

•	 In terms of hazardous materials incident response and mitigation;

•	 Relative to EMS transport costs; or

•	 As it is associated with fire service response for performing life-saving actions.

A summary table and the document abstracts are included in the Appendix. 

Legislation

Legal considerations are an important part of any decision that 

TIM agencies face because the risk of litigation and the possibility 

of negligence can cause negative publicity and hurt the ability of 

the agency to deliver services.

Cost Management

Research did not reveal any evidence of legislation that requires 

agencies to manage the costs associated with TIM. 

Cost Recovery

Figure 5 shows the levels of government where legislation has been enacted to address TIM. As the 

figure shows, the authority to seek reimbursement for TIM can be granted from almost every level 

of government; however, the type of costs that can be recovered can be as specific as the exact 

type of actions taken at the scene. 

The Federal Government, through Federal law and rulemaking, has enacted legislation designed 

to safeguard the environment and overall public safety. State legislation is enacted by State 

Legislatures and is assigned to an agency for policy development and enforcement. These 

policies have been aimed at providing guidance to local governments regarding their latitude for 

implementing ordinances. Finally, ordinances enacted by local governments define from whom 

costs may be recovered, the types of costs that may be recovered, and the applicable fee structures. 

Figure 5 – Sources that may enable 

TIM cost recovery statutes

FEDERAL LAW

STATE LAW

LOCAL ORDINANCE
21

TIM Cost Recovery: Federal Legislation 

The best documented type of TIM cost recovery is related to the release of chemicals from vehicles. 

The Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) of 1980 

(amended in 1986) and the Oil Pollution Act of 1990 provide the basis for authorization to recover 

costs associated with the release of hazardous materials into the environment. Each Act specifically 

addresses the authority of jurisdictions to respond to emergencies with impending or actual 

substance release, and each Act also addresses the responding agencies’ right to reimbursement. 

An excerpt from the CERCLA Chapter 103 in Figure 6 outlines local authority parameters. The Oil 

Pollution Act has wording similar to that in the example below. Notably, no Federal legislation exists 

to recover costs associated with TIM when the environment is not at risk.

CERCLA Chapter 103 Section 9623

(a) Application

Any general purpose unit of local government of a political subdivions which is 

affected by a release of threatened release at any facility may apply to the President 

for reimbursement under this section.

(b) Reimbursement

(1) Temporary emergency measures

The President is authorized to reimburse local community authorities for expenses 

incurred (before or after October 17, 1986) in carrying out temporary emergency 

measures necessary to prevent or mitigate injury to human health or the 

environment associated with the release or threatened release of any hazardous 

substance of pollutant to contaminant. Such measure may included, where 

appropriate, security fencing to limit access, response to fires or explosions, and 

other measures which require immediate response at the local level.

(2) Local funds not supplanted

Reimbursement under this section shall not supplant local funds normally provided 

for response.

(c) Amount

The amount of any reimbursement to any local authority under 

subsection (b)(1) of this section may not exceed $25,000 for a single response. The 

reimbursement under this section with respect to a single facility shall be limited 

to the units of local government having jurisdiction over the political subdivision in 

which the facility is located.

(d) Procedure

Reimbursement authorized pursuant to this section shall be in accordance with 

rules promulgated by the Administrator within one year after October 17, 1986.

Figure 6 – Comprehensive Environmental Response, Compensation, and Liability Act of 1980 

(As Amended in 1986)
22

TIM Cost Recovery: State Legislation 

A number of States have enacted legislation addressing TIM cost recovery. The two types of laws 

that jurisdictions at the State and local level must abide by are either enacted laws or common law 

doctrine. Enacted laws are those which are introduced by elected officials of the legislative branch 

of government and are signed by the chief executive (Governor or Mayor). Common law doctrine 

embodies precedents that have been set based on decisions made by courts. When a court makes 

a decision, if a similar case comes before the same court or a lower court in the same jurisdiction in 

the future, the court is bound by the precedent set by the earlier case. 

Common law doctrine is applicable to TIM cost recovery because of the municipal cost recovery 

model or free public services doctrine,6 which has been defined by court cases dating back to the 

1970s. Opponents of TIM-related cost recovery argue in support of this doctrine, which states 

that public expenditures made in the performance of governmental functions are not recoverable 

because this would represent a form of double taxation. Proponents of TIM cost recovery argue 

that the doctrine is only applicable for situations where the jurisdiction would sue for recovery. If 

user fees are instead implemented, this would not be a form of double taxation as only those who 

choose to use the roadway and operate a vehicle in a way that causes a crash would be charged 

the fee. Proponents further argue that these fees are needed to supplement depleted emergency 

responder budgets and that the allocation of tax money to support them is solely for the purpose 

of making the service available and sustaining the infrastructure to support it.

The free public services doctrine does not apply in cases where damage to public property occurs 

because of the crash. In this case, the doctrine allows States to recover the cost to repair the 

infrastructure. A summary of the way States have interpreted this doctrine and addressed it with 

legislation is summarized in the Appendix. 

The types of cost recovery different States have allowed include:

•	 Emergency Medical Services – the ability to recover costs associated with response and patient

transport. 

•	 Fire – the ability to recover the cost associated with response and recovery activities. Items that are

deemed medically necessary are typical exempt if this type of recovery is prohibited. “Medically

necessary”has been defined in some contexts as actions that are essential to the survival of the

vehicle occupants, such as extrication. 

•	 HAZMAT – The legal right to recover costs associated with the emergency response and recovery

efforts due to the release of hazardous materials from responsible parties.

•	 Infrastructure – The ability to recover costs associated with the repair or replacement of the roadway

or roadway components from liable drivers.

•	 Law Enforcement – the ability to recover costs associated with response and/or crash investigation

from involved parties or insurance companies.

•	 Transportation – the ability to recover costs associated with response and traffic control.

Many States have not enacted legislation either permitting or prohibiting specific types of cost 

recovery. This means that in these States the free public services doctrine governs, and allowable 

procedures are dictated by local court decisions. Where legislation exists, it can be classified into 

the categories shown below:

•	 All drivers can be charged by all responding agencies.

•	 The at-fault driver can be charged by all responding agencies.

6 Lytton, Timothy D. “Should Government Be Allowed to Recover the Costs of Public Services from Tortfeasors?: Tort 

Subsidies, the Limits of Loss Spreading, and the Free Public Services Doctrine,” Tulane Law Review (76 Tul. L. Rev. 727) 

February 2002.
23

•	 The at-fault driver can be charged by all responding agencies, except DOTs.

•	 If the at-fault driver is under the influence of drugs or alcohol they can be charged by all responding

agencies, except the DOTs.

•	 Drivers can be charged by all agencies except law enforcement.

•	 Drivers can be charged by all agencies except fire departments.

Advocacy Groups on TIM Cost Recovery 

There are both proponents and opponents to legislation that allows agencies involved with TIM 

to recover costs. The most often stated arguments focus on the enactment of ordinances by local 

jurisdictions that allow response agencies to charge a fee for response. Table 5 shows common 

arguments used by both the opponents and proponents of accident recovery fees.

Table 5 – Viewpoints on TIM Cost Recovery by Means of User Fees

Proponent Viewpoints Opponent Viewpoints

•	 The alternative is to reduce service

•	 Represents a true user fee

•	 Taxes are for making the resource available 

only

•	 The reduction in property and other tax 

revenues has placed additional stress on the 

emergency response community

•	 Education can change the view point of the 

public

•	 Responder and motorist safety can be 

compromised

•	 There are no alternatives

•	 Constitutes double taxation

•	 Increases insurance rates

•	 Is ineffective

•	 Increases citizen financial stress

•	 Re-victimizes those affected by vehicle 

crashes

•	 Could cause motorists not to seek emergency 

services

•	 Is not successful

•	 Creates a negative public opinion of 

government

Fire Services and EMS

Fire departments bear a significant amount of cost when it comes to traffic incidents. They 

purchase and maintain some of the most expensive equipment at the crash scene, have rigid 

training requirements, and are often put in harm’s way for the longest duration. Firefighters often 

experience many of the same costs whether they are career or volunteer personnel. 

The U.S. Fire Administration (USFA) developed a publication that identifies sources of funding from 

Federal and local revenue sources with potential to supplement EMS agencies and fire departments 

budgets, including the Firefighter Investment and Response Enhancement (FIRE) Act, the Staffing 

for Adequate Fire and Emergency Response (SAFER) Act grant program(s), as well as other 

important grant programs.7 Many of these sources identified by the USFA may be applicable to TIM 

response resource needs.

Cost Management

According to the U.S. Fire Administration, emergency medical incidents comprise two-thirds 

to three-quarters of fire department calls.8 As described in the sample of a rural volunteer fire 

company shown at the right,9 there is no effort or emphasis placed on cost forecasting and tracking 

costs related to TIM because in many cases there is a large discrepancy between the costs to do 

business versus the amount that can be recovered. Similarly, at career fire departments where 

salaries are a major portion of costs, the emphasis is not usually placed on the type of call being 

7 Federal Emergency Management Agency, United States Fire Administration, Funding Alternatives for Fire and Emergency 

Services. Available online at: http://www.usfa.fema.gov/downloads/pdf/publications/fa_331.pdf 8 Ibid. 9 Personal interview with Thomas Schofield, May 14, 2011.
24

responded to but on the pure volume of calls. 

In both the case of volunteer fire departments 

and career fire departments, the knowledge of 

how much of their operating budget is dedicated 

to TIM is seen as being of little benefit. Instead, 

the emphasis is on paying salaries (in career 

departments) and determining what the needs 

will be for gear and equipment. 

The accurate assessment of costs associated with 

a fire company’s TIM responses could, in fact, be 

useful in working with local and State officials 

to help identify not only fire company funding 

sources and levels, but the importance of a 

coordinated overall TIM approach.

Cost Recovery

The U.S. Fire Administration’s publication on 

funding alternatives offers 10 different ways that 

fire departments can recover costs:10

1.	 Taxes – property, local income, and generalsales;

2.	 Borrowing – such as bonds and certificates of

participation;

3.	 Leasing – to avoid large capital costs;

4.	 Benefit assessment charges – designed to

supplement policies allowable by property tax

laws, these fees assign values to conveniences

or benefits such as having the fire station near

a property or having special services;

5.	 Fees – costs imposed on users for the purpose

of building small amounts of revenue based

on services provided;

6.	 Fines and citations – revenue generated by

penalizing individuals for code violations;

7.	 Cost sharing – working with other jurisdictions

to share common costs;

8.	 Strategic alliances – joining together with

other jurisdictions to service other areas;

9.	 Consolidation – reducing the amount of individual resources in an area for covering the same

geographical area; and

10.	Sales of assets and services – including the sale or auctioning of equipment, training services, facility

rental, and delinquent tax certificates.

While none of the 10 cost recovery methods mentioned above is directly linked to TIM, these 

methods are all ways that fire departments can recover costs in general. This recovery allows them 

to offer their services in their jurisdictions and can be enacted at the local government level.

In addition to the local cost recovery methods mentioned above, the U.S. Fire Administration’s 

publication also highlighted eight methods that individual States can use to help fire departments 

offset operating costs.11

10 FEMA, Funding Alternatives for Fire and Emergency Services, pp. 1-2 – 1-3. 11 FEMA, Funding Alternatives for Fire and Emergency Services, p. 3-1.

Rural Volunteer Fire

Company Experience

Q: How does your fire department 

manage the costs associated with 

responding to crashes?

A: We don’t really track the differences 

in the type of events that we respond to. 

When we are planning for the next budget, 

we look at what our costs were from last 

year and add a percentage for inflation and 

rising costs, what we want to invest in next 

year and what the needed level of revenue 

will be to obtain our goals. For instance, 

we currently need to purchase a new 

rescue unit so we looked at the average 

amount of new and used rescue units then 

divided up the cost until the yearly amount 

that we need to save fits into what we 

think we can collect with fund raisers and 

other revenue sources. Currently, it may 

be 8 years or more until we can afford to 

get the vehicle we need, so we also have 

to consider what will need to be done to 

maintain the current rescue unit we have. 

Another important aspect to consider 

is that even though we know that an 

ambulance call will cost us approximately 

$450 - $500 and a response to a crash will 

cost $750, often we cannot collect that 

because Medicare for example, only pays 

$80 per call. So we have to write-off and 

subsidize the rest of the cost in other ways. 

Thomas J. Schofield, President 

Factoryville Fire Department, Factoryville, PA
25

1.	 Low interest loans;

2.	 Insurance surcharges (fire only);

3.	 Driving related fees and fines (EMS only);

4.	 Surplus vehicles and equipment;

The services associated with TIM are included in the recovery methods shown above since they are 

all efforts to recover the cost of providing service.

Since many fire departments also provide EMS service, the cost of operating the ambulance 

service is included in annual budget planning. Below is an example of fees being implemented for 

responding to emergencies by Madison County, Virginia.12

12 Madison County Virginia Website, “EMS Cost Recovery” page, accessed June 2011. Available at: http://www.madisonco.

virginia.gov/index.php?option=com_content&view=article&id=320:ems-cost-recovery&catid=63:emergency-medicalservices&Itemid=62

On June 8, 2010 the Madison County Board of Supervisors enacted an ordinance, pursuant to Section 32.1-

111.14 of the Code of Virginia, to authorize an Emergency Medical Services (“EMS”) Cost Recovery Program. 

Under this program the County will obtain financial reimbursement for the cost of providing emergency 

medical services and medically necessary ambulance transportation. EMS Cost Recovery will allow Madison 

County to recoup costs from individuals who benefit directly from these emergency services, including many 

non-County residents. The vast majority of costs collected will be reimbursed from Medicare, Medicaid and 

private insurance companies. Madison County will begin billing for EMS services, effective August 1, 2010. 

Q: How will billing for EMS services work?

A: Beginning August 1, 2010, Madison County will generate a bill each time EMS services, including ambulance 

transports, are provided to a patient by the staff of the County’s Department of Emergency Medical Services (“MEMS”). 

Madison County has contracted with Diversified Ambulance Billing, LLC (“DAB”). Following receipt of EMS services, 

a patient will receive correspondence asking for confirmation of residence address and insurance coverage. Once 

information about a patient’s insurance coverage has been verified, a claim form will be forwarded to his insurance 

provider, Medicare, or Medicaid as may be applicable. Patients themselves will not be billed until all insurance options 

have been exhausted.

Q: Will I be billed for amounts not covered by insurance?

A: A County resident will be billed only to the extent of his or her Medicare, Medicaid or other health insurance 

coverage. Any remaining cost-sharing amounts (e.g., co-payments, deductibles) will be waived for County residents. If 

you are a County resident who is not covered by Medicare, Medicaid or any other health insurance coverage, charges 

for EMS services will be waived. If you are a non-resident, then your insurance company will be billed and you will 

subsequently receive a bill for applicable cost-sharing amounts remaining after insurance claims have been processed. 

Any non-resident who is without any form of insurance coverage will be billed for the entire amount of the EMS services 

delivered. If a patient who receives a bill is unable to pay, then the patient may apply for a financial hardship waiver.

Q: What are the billing rates for EMS services?

A: Madison County will charge a fee of $9.00 per mile for each ambulance transport and a fee of $350 to $575 for EMS 

services provided in connection with the transport, depending on the level of EMS care required by the patient. There 

are three levels of EMS care: (1) Basic Life Support (BLS); (2) Advanced Life Support-1 (ALS1); and (3) Advanced Life 

Support-2 (ALS2). Madison County’s fees are established by resolution of the Board of Supervisors, consistent with rates 

allowed by the Center for Medicare and Medicaid Services (CMS) for our geographic region.

Q: I receive requests from the Volunteer Rescue Squad for donations. Does this program replace the need for volunteer 

funding?

A: No. Revenue recovered as a result of this program goes into the County’s General Fund. Although the County’s 

Volunteer Rescue Squad receives financial support from the County’s General Fund each year, a significant portion of 

the volunteer agency’s costs must be covered by donations received from the community.

5.	 Special purpose grants;

6.	 Matching grants;

7.	 Technical assistance/support; and

8.	 Subsidized training.
26

The example from Madison County, Virginia, shows that jurisdictions see the need to implement 

these types of fees but are very careful to be explicit in describing how the fees will be imposed, 

how and when they will be collected, and how much will be charged.

Overall, the state of the practice for TIM cost recovery within public safety groups such as volunteer 

and career fire departments and EMS providers is based on local ordinances and is typically not 

divided into a separate category for TIM.

Law Enforcement Agencies

As with fire and EMS services, law enforcement agencies provide staffing on a 24/7 basis regardless 

of the specific needs of citizens. For that reason, no significant emphasis is placed on cost 

management of TIM activities at law enforcement agencies unless the costs are being managed for 

a specific reason, such as grant reimbursement or targeted enforcement. 

For cost recovery the experience is similar. Some States have enacted legislation that prohibits cost 

recovery associated with incident response while others are silent on the matter. The practice of 

recovering costs associated with TIM is not widespread among law enforcement agencies. 

The Florida Highway Patrol provided the following example of a cost management tool. Figure 7 

shows an example of the system they use to record the agency’s time spent dealing with a crash. 

This system combines the need to track time spent at crashes with elements that are usable as 

performance measures for elements on the standard incident timeline. Key data points collected 

include time of event, report, dispatch, arrival on scene, roadway clearance, and scene clearance.

Figure 7 – Example of Cost Tracking Tool at the Florida Highway Patrol13

13 Provided by Chief Grady Carrick of the Florida Highway Patrol
27

Transportation Agencies

To determine the extent to which TIM cost management and cost recovery is taking place at State 

transportation agencies, the Research Team conducted a survey of practitioners who belong to 

the NTIMC’s TIM Network. The TIM Network is comprised of practitioners from all disciplines of 

traffic incident management. With responses received from 21 separate agencies, 15 respondents 

indicated that their agency performs at least one type of cost management while 9 agencies 

attempt to recover costs. 

Cost Management

According to the agencies that indicated they manage TIM costs, the most frequently used type 

of cost management is planning. These agencies plan for TIM costs in a variety of categories, but 

the most common type of cost that is managed is for personnel overtime. Those costs are seen as 

most controllable when costs are being managed or eliminated. The most common types of TIM 

operational costs tracked are equipment time and personnel overtime.

Some discrepancy exists in the current practice between the costs that are planned for versus the 

costs that are tracked. As discussed in previous sections, most of the costs that are tracked fall 

under the tactical portion of a traffic incident. Costs for strategic and support activities are less 

documented. 

TIM cost planning and tracking information were examined by asking three questions relative to 

how TIM cost information is collected and reflected through transportation agencies:

•	 At what budget level is the cost of TIM reflected?

•	 Are employees required to record TIM activities individually?

•	 Does the agency budget management procedure or software show costs for TIM as a separate

category?

In most cases, the amount budgeted for TIM is typically only known at the local level, where 

employees are usually not required to record TIM activities individually. This indicates that it would 

be very difficult for many transportation agencies to determine total annual TIM expenditures. 

Only three of the responding agencies have specified areas within their budget management 

process or system that show a breakdown of these costs. 

The solution for TIM cost management appears to coincide with the larger issues that face TIM 

regarding organizational visibility. As mid-level managers search for ways to express the overall 

benefit of a TIM program, a way to identify resources is needed to demonstrate the value of cost 

management and show how the knowledge of cost management activities can translate into a 

better understanding of the true return on investment. 

As previously mentioned, the survey indicated that cost tracking is taking place at agencies. Figure 8 

on the next page shows an example of cost tracking by the Kansas Department of Transportation for 

a crash where a truck hauling a backhoe struck a bridge. This event resulted in a long-term closure 

for at least a portion of the roadway while repairs were made to the bridge. As the image in Figure 

8 shows, cost are tracked for four categories: direct labor, travel expense, equipment usage and 

materials. A hand-written note indicates that the majority of the labor costs were for traffic control.
28

Figure 8 – Sample of Cost Tracking14

It is unclear if there is a true demarcation point between TIM costs and the costs associated with 

repairing the infrastructure as described in the material category of the tracking sheet. However, 

for Kansas, the total cost was captured as being due to the crash.

Finally, survey respondents were asked to specify the methods that their agency uses to analyze 

and evaluate the costs associated with TIM. Respondents indicated performance measurements 

were the most frequently used method followed by cost-benefit ratios and a comparison of 

revenues and expenses. 

Cost Recovery

The most common type of cost recovery employed by State transportation agencies is the recovery 

of those costs related to infrastructure damage. Many States have enacted legislation that allows 

for the transportation agency to submit claims to individuals or insurance companies for damages 

to infrastructure. Figure 9 shows an example of this type of legislation from Alabama.15

14 Provided by Wayne Nelson of the Kansas Department of Transportation. 15 Find Law Website, “ALA CODE § 32-5-9 : Alabama Code - Section 32-5-9: Liability For Damage To Highway Or Structure.” 

Available at: http://codes.lp.findlaw.com/alcode/32/5/1/32-5-9
29

Another example of cost recovery can be found in California, where public agencies are allowed to 

collect fees from drivers that crash, require emergency response, and are found to be driving under 

the influence of drugs or alcohol. The applicable sections of the law are summarized in Figure 10.16

16 Justia US Law Website, “2009 California Government Code - Section 53150-53159: Article 8. Costs of Emergency 

Response.” Available at: http://law.justia.com/codes/california/2009/gov/53150-53159.html

Alabama Code - Section 32-5-9 — Liability for damage to highway or structure.

(a) Any person driving any vehicle, object or contrivance upon any highway or highway 

structure shall be liable for all damage which said highway or structure may sustain as a result 

of any illegal or careless operation, driving or moving of such vehicle, object or contrivance, 

or as a result of operating, driving or moving any vehicle, object or contrivance weighing in 

excess of the maximum weight prescribed by law but authorized by a special permit issued 

as provided in Section 32-9-29.

(b) Whenever such driver is not the owner of such vehicle, object or contrivance, but is so 

operating, driving or moving the same with the express or implied permission of said owner, 

then said owner and driver shall be jointly and severally liable for any such damage.

(c) Such damage may be recovered in a civil action brought by the authorities in control of 

such highway or highway structures.

Figure 9 – Alabama Law for Highway Damage Liability 
30

California Code: Government Code Article 8. Costs of Emergency Response

53150. Any person who is under the influence of an alcoholic beverage or any drug, or the 

combined influence of an alcoholic beverage and any drug, whose negligent operation of 

a motor vehicle caused by that influence proximately causes any incident resulting in an 

appropriate emergency response, and any person whose intentionally wrongful conduct 

proximately causes any incident resulting in an appropriate emergency response, is liable for 

the expense of an emergency response by a public agency to the incident.

53153.5. (a) Any person 18 years of age or older who is convicted of making a false 

police report, in violation of Section 148.3 of the Penal Code, and that false police report 

proximately causes an appropriate emergency response by a public agency, is liable for the 

expense of the emergency response made by the responding public agency to the incident.

53154. The expense of an emergency response shall be a charge against the person liable for 

expenses under this article. The charge constitutes a debt of that person and is collectible by 

the public agency incurring those costs in the same manner as in the case of an obligation 

under a contract, expressed or implied, except that liability for the expenses provided for 

in this article shall not be insurable and no insurance policy shall provide or pay for the 

expenses.

53155. In no event shall a person’s liability under this article for the expense of an emergency 

response exceed twelve thousand dollars ($12,000) for a particular incident.

53156. As used in this article:

 (a) “Expense of an emergency response” means reasonable costs incurred by a public 

agency in reasonably making an appropriate emergency response to the incident, but 

shall only include those costs directly arising because of the response to the particular 

incident. Reasonable costs shall include the costs of providing police, firefighting, rescue, 

and emergency medical services at the scene of the incident, as well as the salaries of the 

personnel responding to the incident.

 (b) “Public agency” means the state and any city, county, municipal corporation, district, or 

public authority located, in whole or in part, within this state which provides or may provide 

firefighting, police, ambulance, medical, or other emergency services.

Figure 10 – California Emergency Response Law 
Credit: iStockphoto Credit: iStockphoto Credit: iStockphoto
32

Chapter 4. Translatin g Cost Mana gement

Principles into TIM Practice

Based on the survey responses, it is evident that there is no widespread practice of managing 

and recovering TIM costs. With State transportation funding uncertain due to current economic 

conditions, agency budget authorities and elected officials are likely to continue to examine 

closely those services that transportation agencies provide. Since capacity-enhancing projects 

will likely continue to decrease in frequency, good TIM practices are likely to replace that void. As 

a result, a good TIM program that incorporates the NUG is very likely to become more crucial to 

transportation agencies that are striving to maintain their capabilities. The following roadmap 

presents a good approach to shifting toward a managed TIM cost approach. A plan for managing 

and recovering TIM costs must address how agencies can maintain a service that has become a 

necessity in a time of limited staffing and financial constraints.

Roadmap for Managing TIM Costs

To prepare for this eventual future, good TIM cost management will be necessary and will entail 

a shift in agency preparedness over the next few years. While the components of cost planning, 

tracking, analysis and evaluation, and decision discussed in Chapter 2 represent the mechanics of 

TIM cost management, three primary elements also need to be managed: asset utilization, resource 

utilization, and performance measurement. It is true that some of the broad TIM cost management 

components shown in Figure 11 below can overlap with other parts of the broad definition of 

transportation operations, but that makes them no less important. The three primary elements are 

defined as follows:

•	 Asset management – consists of the process to understand costs of devices, facilities and other

physical, non-human TIM program elements;

•	 Resource management – consists of the process to understand costs associated with personnel

(including both in-house and consultant) situations; and

•	 Performance measurement – consists of understanding what benefit assets and resources are

providing to the system or what implications that lack of assets and resources are having on overall

performance.

Through the application of each of these aspects, it is important not to lose sight of the importance 

of visualization. Political leaders and the public need to be provided with graphical representations 

of information that is easy to understand and interpret. For this reason, it is useful to pre-plan what 

message will be well received by the target audience as agencies execute this roadmap to TIM cost 

management. 

Asset

Utilization

Resource

Utilization

Performance 

Measurement

TIM Cost

Management

Figure 11 – Broad Picture of TIM Cost Management Components 
33

Table 6 – Roadmap to a TIM Cost Management Program

Category Start-up Plan Transition Plan Established Program

Asset Utilization •	 Determine TIM 

Inputs for asset 

management

•	 Collect baseline 

requirements

•	 Complete TIM system 

inventories

•	 Maintain maintenance 

costs and operating 

costs for historical 

reference

•	 Use asset life-cycle 

and replacement cost 

estimates to plan for 

costs on an annual basis

•	 Use visualization tools to 

convey the cost of assets 

versus performance 

Resource 

Utilization

•	 Determine discrete 

TIM functions by 

discipline and by 

position

•	 Determine shared 

resources and 

interdependent 

resources

•	 Baseline employee 

capabilities versus 

each identified discrete 

function

•	 Identify gaps in 

functions provided

•	 Develop resource 

training lifecycle

•	 Include systems to 

include discrete coding 

functions for direct and 

indirect 

•	 Use cost center 

accounting to track and 

analyze TIM resource 

costs

•	 Assign a charge code 

for TIM strategic, tactical 

and support activities

Performance 

Measurement

•	 Determine how 

the NUG should be 

measured

•	 Determine what 

input and output 

gaps exist for NUG 

reporting

•	 Implement a NUG 

Performance 

Measurement Program

•	 Collect baseline 

information to establish 

a performance index

•	 The performance 

measures from other 

sections

Asset Utilization

Assets are defined as quantifiable physical objects, and resources are defined as people and time. 

The reason for making the distinction for TIM is that TIM assets often fall into the tactical and 

supporting categories, while TIM resources are present in all TIM categories. Asset management is 

a decisionmaking framework focused on the purchase, construction, maintenance, replacement, 

and retirement of fixed assets. Asset management covers an extended time horizon and draws 

from economics as well as engineering. Asset management incorporates the economic assessment 

of trade-offs between alternative investment options, both at the project level and at the network 

or system level, and uses this information to help make cost-effective investment decisions. 

The American Association of State Highway and Transportation Officials hosts a website on 

transportation asset management (http://assetmanagement.transportation.org/tam/aashto.nsf/home) 

and has published a guide to asset management (http://downloads.transportation.org/AMGuide.pdf). 

The examples in the guide are predominantly oriented toward pavement and bridges, but the 

guide explicitly includes all transportation assets, including ITS assets. Figure 12 shows an example 

of the process to allocate resources for asset management. 
34

Figure 12 – Example of Resource Allocation and Utilization Process in Asset Management

Policy Goals and Objectives, Performance Measures

Examples: Transportation System Performance (including Customer 

Perceptions), Economic, Social/Environment

Planning and Programming

Options, Project Evaluations, and Tradeoff Analyses Across (Examples)

Asset Classes

Pavement

Bridge

ITS Components

Transit

Rail

Port

Investment Categories

System Preservation

Operating Eciency

New Capacity

Safety

Funding Types

Capital

Operations

Maintenance

Decisions on Allocating Agency Resources

Examples: Financial, Human, Information

Program Delivery

Examples: Inter-Goverment Agreements, Outsourcing, 

Procurement Options

Systems Monitoring and Performance Results

Quality Information and Analysis

Examples: Inventory, Condition, Performance

The U.S. DOT Intelligent Transportation Systems Joint Program Office maintains an online 

knowledgebase of links to summaries that detail the benefits and costs of deploying various types 

of ITS, including those deployed for incident management. The web page also contains links to 

summaries of lessons learned and lists ITS deployments by type. The knowledgebase is available at 

http://www.itskrs.its.dot.gov/its/itsbcllwebpage.nsf/krhomepage#.

In addition, the FHWA also houses its own Office of Asset Management, which has three key 

responsibilities:

•	 Provide national leadership in asset management principles for highway program administration;

•	 Develop asset management policies for pavement, bridge, and system preservation; and

•	 Partner with the American Association of State Highway and Transportation Officials (AASHTO), other

FHWA offices, and others to conduct nationwide programs.

The FHWA Office of Asset Management maintains an asset management website, which is available 

at http://www.fhwa.dot.gov/infrastructure/asstmgmt/asstfact.cfm.
35

Resource Utilization

A complicating factor in TIM cost management is the fact that incident management is a multiparty function, typically involving, at a minimum, the State transportation agency, local police, and 

local fire fighters/EMS. The FHWA publication Traffic Incident Management Resource Management17

demonstrates the methods and benefits of adopting a multi-disciplinary approach to managing 

the resources for TIM. The document describes how the efficient and effective management of TIM 

resources relies on four key guidelines for resource utilization:

1.	 Use personnel who are best qualified (i.e., capable but not over-qualified) for the various tasks (this,

in turn, allows alternately skilled personnel to focus on other incident management functions);

2.	 Use appropriate technology capable of supporting various on-site resource tasks;

3.	 Use appropriate equipment by function (i.e., use of the least costly equipment capable of performing

the function); and

4.	 Reduce the overall resources required through reduced redundancy across disciplines.18

Moving towards a multi-disciplinary approach to TIM resource utilization may lower overall costs, 

but can increase costs for one or more agencies. Several options for cost-sharing arrangements 

to address this disparity exist. The Traffic Incident Management Resource Management guidebook 

explores these options in some depth, noting that, at present, most examples of multi-agency costsharing are limited to those in related domains outside of TIM, such as emergency management. 

The best examples that relate to TIM are the jointly managed traffic management centers (TMC) 

that exist in numerous metropolitan areas across the country. 

For many transportation agencies, providing stand-by personnel who are ready to respond to an 

incident at a moment’s notice is difficult. Resource utilization is based on the amount of time that 

active resources are dedicated to a specific task, the number of times that stand-by resources have 

to be activated, and the duration of their activation period. 

Use Cost Center Accounting

Use of the multi-disciplinary approach to TIM resource utilization would create a need to track 

costs closely, especially with transportation agencies. For this reason, implementing a “cost 

center” accounting practice is appropriate. This type of accounting can begin to be integrated 

into transportation agencies for capturing TIM costs from different divisions within the agency. 

This type of cost accounting will also be applicable as multi-disciplinary TIM resource utilization 

occurs. A cost center is defined as an area, machine, or person to whom direct and indirect 

costs are allocated. Each cost center is a distinctly identifiable department, division, or unit of an 

organization whose managers are responsible for all associated costs and for ensuring adherence to 

its budgets.19 Dividing an organization into cost centers helps the agency determine where its costs 

are incurred within the organization. Furthermore, if costs are planned at the cost center level, cost 

efficiency can be checked at the point where costs are incurred.20

17 FHWA, Traffic Incident Management Resource Management, FHWA-HOP-08-060 (Washington, DC: January 2009).

Available at http://ops.fhwa.dot.gov/publications/fhwahop08060/default.htm. 18 Ibid. pp. 12-13. 19 WebFinance, Inc., “BusinessDictionary.com” Web site. “Cost center” definition. Available at: http://www.businessdictionary.

com/definition/cost-center.html 20 SAP AG, The SAP Help Portal, “Cost Center Accounting” Web page. Available at: http://help.sap.com/saphelp_45b/helpdata/

en/08/513e4243b511d182b30000e829fbfe/content.htm
36

Figure 13 breaks down transportation resource management into the Strategic (Planning and 

Preparedness), Tactical (Response), and Support (Recovery) Activities categories, with Cost 

Management and Cost Recovery opportunities housed under the Support category.

Many examples of effective cost management exist, and, although several focus only on managing 

tactical costs, some current systems are capable of supporting cost center accounting practices. 

One example is from Pennsylvania. The Pennsylvania Department of Transportation (PennDOT) 

captures all reimbursable activities in their cost accounting system. PennDOT maintenance 

personnel who respond to crashes that involve damage to department property are required to fill 

out a form that describes the damage, the people liable for the damage, and an estimate of how 

much it will cost to restore the affected area to its previous condition.

Figure 13 – Transportation Resource Management

Transportation TIM 

Resource Management

Strategic Tactical Support

Studies/Evaluations

Planning/Program 

Management

TIM Teams

Field Operations

TMC Operations

ITS Deployment

After Action 

Reviews

Cost Management

Cost Recovery
37

Figure 14 – Screen 1 of the Pennsylvania Incident 

Cost Management System

The forms shown here are used to capture the information filled out by maintenance personnel. 

Figure 14 shows the location data, identifies who is responsible for the follow-up work, and 

provides a description of what took place. Figure 15 shows which internal tracking number has 

been assigned to the event, when it occurred, information about the liable party, and a detailed 

estimate of what the needed repairs will involve. Costs are not shown as part of this screen because 

the prevailing rates for each pay item will be used at the time cost recovery action and/or litigation 

is pursued. Finally, Figure 16 shows a document overview of how the incident is tracked.

Of particular interest in Figure 16 is the information shown in the box at the top of the screen. This 

shows that there are extensive electronic systems in place to manage the costs associated with 

repairing public property after a crash occurs. The money that is collected is deposited into the 

State’s general fund account.
38

Figure 15 – Screen 2 of the Pennsylvania Incident Cost Management System

Figure 16 – Screen 3 of the Pennsylvania Incident Cost Management System
39

Performance Measurement

In the future, performance measurement will be a fundamental aspect of doing business for any 

organization that receives funding from the Federal government in the years ahead. In addition, 

identifying opportunities to recover costs in the wake of reduced funding will help organizations 

make better informed decisions about how services can be provided. 

While not strictly “cost management,” developing performance measures and making comparisons 

to TIM costs provide useful information to TIM managers and, perhaps more importantly, help to 

“sell” TIM to the public and those making funding allocation decisions. As with most transportation 

agency efforts, TIM must be able to show what benefit is being realized when compared to the cost 

being incurred. Performance measurement is a key component to being able to demonstrate the 

benefit of money spent. Understanding the costs of TIM through a cost management process that 

is linked to the performance result will ultimately become one of the key factors of cost-benefit 

analysis. 

An FHWA program called the “TIM Performance Measures Focus States Initiative” convened incident 

management professionals from 15 States to develop a set of commonly defined performance 

measures.21 The initiative identified and defined the following three core performance measures:

1.	 Roadway Clearance Time - The time between first recordable awareness of an incident (detection/

notification/verification) by a responsible agency and first confirmation that all lanes are available for

traffic flow.

2.	 Incident Clearance Time - The time between the first recordable awareness and the time at which the

last responder has left the scene.

3.	 Secondary Crashes - The number of crashes that occur during the period beginning with the time

of detection of the primary incident through the clearance of the primary incident where a collision

occurs either a) within the incident scene or b) within the queue, including among vehicles traveling

in the opposite direction, resulting from the original incident.

Producing these measures can be hampered by the need to share data across responder 

agencies, including law enforcement and fire protection; however, these performance measures 

are informative by themselves as stand-alone measures. They also can be combined with cost 

information to yield cost-effectiveness measures such as labor cost per minute reduction in 

roadway clearance time.

FHWA’s TIM Performance Measurement Knowledgebase is a highly useable, online 

reference that provides transportation professionals the knowledge and tools they 

need, including sample documents and models from other states, to encourage the 

successful implementation of program-level TIM performance measures in their state. The 

Knowledgebase can be found at http://ops.fhwa.dot.gov/eto_tim_pse/preparedness/tim/

knowledgebase/

Beyond the cost-effectiveness analysis is the cost-benefit analysis, which compares the costs of 

a TIM program to a monetary valuation of its benefits. A number of agencies have produced 

cost-benefit analyses for an aspect of their TIM program, most commonly for service patrols. The 

calculated cost-benefit ratios have uniformly been greater than 1, indicating benefits exceed 

costs. The examples below show how monetized benefits include fuel cost savings and the value 

of travel-time savings. Measured benefits often include savings in costs (damages) related to 

secondary crashes and reduced pollutant emissions.

21 FHWA, Federal Highway Administration Focus States Initiative: Traffic Incident Management Performance Measures Final 

Report, FHWA-HOP-10-010 (Washington, DC: December 2009). Available at: http://www.ops.fhwa.dot.gov/publications/

fhwahop10010/sec3.htm
40

“The California Life-Cycle Benefit/Cost Analysis Model (Cal-B/C) is an Excel workbookbased tool for preparing economic evaluations on prospective highway and transit 

improvement projects within the State of California. An extension to the model added the 

ability to evaluate certain ITS projects, include an incident management component. The 

ITS evaluation module uses the IDAS (ITS Deployment Analysis System) model, developed 

for the U.S. FHWA. IDAS is an ITS sketch-planning analysis tool that can be used to estimate 

the impacts, benefits and costs resulting from the deployment of ITS components. IDAS 

operates as a post-processor to travel demand models. The set of impacts evaluated 

by IDAS include changes in user mobility, travel time/speed, travel time reliability, fuel 

costs, operating costs, accident costs, emissions, and noise. The incident management 

component of IDAS is based on the application of a simplified set of benefits measures for 

three possible levels of incident management system deployment.” 22

“A vehicle queuing and traffic bottleneck analysis was applied to determine cumulative 

vehicle delays.” The model is based on procedures provided in the Highway Capacity 

Manual and Traffic Incident Management Handbook (USDOT, 2000) and considers incident 

characteristics, roadway geometry, and traffic flow characteristics at the incident location 

to calculate the impact of each incident on vehicle queuing and delay. The results obtained 

from the model are then used to calculate cost of unproductive time, vehicle emissions, 

fuel consumption, and occurrence of secondary incidents attributable to analyzed primary 

incidents. The effects of the Maintenance Operations responding to incidents are calculated 

as a difference between the impacts of incidents with and without their response. The 

benefits of the response are therefore the differences in time, emissions, fuel consumption, 

and secondary incidents of the with-response versus without-response model results. The 

reduction in incident clearance time is modeled at levels ranging from one minute to 30 

minutes. Applied over the 974 incidents in the study database, the one minute incident 

time savings translates into 16 hours of reduced incident time, with associated travel 

delay savings valued at over $555,000, plus an additional savings of $113,000 in fuel use, 

emissions, and accidents, for a total savings of over $668,000. The labor cost of using the 

maintenance operations staff to responds to these incidents was estimated at $510,000. 

The resulting benefit-cost ratio for a one-minute incident reduction time is thus 1.31.” 23

Contracting Emergency Services

Another approach to ensuring that TIM services are always available is for the transportation 

agency to contract with local emergency responder agencies for services as a cost-management 

strategy. By paying a retainer fee for services, performance can be guaranteed by contractual 

obligations and budgeting is clearer. An example would be the pre-positioning of contracted 

special equipment in advance of anticipated winter weather events or other weather-related 

scenarios. Freeway service patrols, when contracted, are also a cost-management strategy that 

has predictable costs for specific service periods. Use of these strategies can also help reduce the 

overall societal costs of TIM activities by improving incident response times and clearing lanes for 

operational reflow sooner.

22 System Metrics Group, Inc., Cal-B/C Technical Supplement Volume 2, Transportation Management Systems (TMS), 

Operational Improvements, Pavement Rehabilitation, and Economic Value Updates, 2004. 23 Spasovic, L.T., Evaluation of NJ DOT Incident Management Support System, 2009.
Credit: iStockphoto Credit: iStockphoto Credit: iStockphoto
42

Chapter 5. Strate gies for Reco verin g

TIM Costs

Good TIM cost management and cost recovery include good incident response management. 

Outlining the most effective TIM coordination techniques and how they help reduce the cost of TIM 

will help establish a capability for better predicting costs associated with the unpredictable events. 

The Pennsylvania Cost Recovery and Tracking System, shown in Figure 18 below, demonstrates that 

the capability exists to expand how much TIM cost information can be collected.

Figure 17 shows the first screen of the Pennsylvania cost recovery tracking system.

Figure 17 – Screen 1 of the Pennsylvania Cost Recovery Tracking System
43

Figure 18 shows the second screen from the Pennsylvania cost recovery tracking system. These 

two figures demonstrate how the financial transaction is tracked to completion when crashes occur. 

This system is most closely associated with recovering costs for infrastructure and the tactical costs 

of TIM.

Legislation

An agency may suggest or support legislation that will enable TIM cost recovery by:

•	 Modifying existing systems to include reimbursement for traffic control, TMC operator time, etc.; and

•	 Allowing an agency to charge a surcharge for DUI crashes.

However, agency TIM managers and decisionmakers cannot rely on legislation as a way to recover 

the costs of TIM. It remains the responsibility of the transportation agency to understand the 

grant process and to continue to explain the benefits of TIM to stakeholders, such as metropolitan 

planning organizations (MPO), so that funding can be made available.

Public-Private Partnerships

Private industry and government entities continue to search for ways to partner on projects. 

Industry and government have discussed partnering in the context of infrastructure maintenance, 

but the concept has not been fully explored in the context of transportation operations or TIM 

beyond safety service patrol vehicles and HAZMAT response capabilities. An opportunity to expand 

this relationship is based on the approaches described below. 

Figure 18 – Screen 2 of the Pennsylvania Cost Recovery Tracking System
44

Safety Service Patrol Programs

This type of partnership is already in place in many areas around the country and provides the 

opportunity to recover costs for TIM. Generally, fees are not assessed to customers of these 

services; however, leasing advertising space on the patrol vehicles or allowing the vehicles to be 

branded by a sponsor demonstrate two ways that these services can be self sustaining.

Selling Traffic Data 

The private sector continues to show interest and value in providing information that has 

traditionally been supplied by the government. Examples of this include many of the items in the 

support portion of TIM such as traffic data providers. If a transportation agency can verify that the 

information it possess is reliable, the information can be sold to traffic data providers. This data can 

be metered and adjusted to reflect the demand from the area. Though no demonstrated practice 

was identified, it is feasible that private providers would find value in partnering with transportation 

agencies to provide more reliable information to customers.

High Occupancy Toll (HOT) lanes

The ability to change the price of travel in a given lane represents an opportunity to include 

the cost of TIM in the fee formula. However, to have TIM as part of the fee formula, an agency 

must have complete awareness of the magnitude of TIM costs. Otherwise, the service cannot be 

accurately represented in the fee formula and the agency misses the opportunity for full cost 

recovery. 

Special Federal Programs

Although the availability of Federal funds to recover TIM-related costs may be more closely 

identified with larger scale emergency transportation events, it is helpful to understand what 

programs are available and when events may qualify. There are specific cases of nationally declared 

disasters which provide opportunities to recover TIM costs through application for special Federal 

funding. The two potential sources are FHWA Emergency Relief Funding and Federal Emergency 

Management Agency (FEMA) funding.
45

Emergency Relief Program: In Title 23, United States Code, Section 125, Congress authorized a 

special program for the repair or reconstruction of Federal-aid highways and roads on Federal lands 

that have suffered serious damage as a result of (1) natural disasters or (2) catastrophic failures from 

an external cause. The program, commonly referred to as emergency relief (or the ER program), 

assists States or their political subdivisions in paying for unusually heavy expenses resulting from 

extraordinary disaster events that sometimes result in the catastrophic failure of the infrastructure, 

which is defined as the sudden and complete failure of a major element of the highway system that 

causes a disastrous impact on transportation services

Examples of natural disasters include floods, hurricanes, earthquakes, tornados, tidal waves, severe 

storms, and landslides, although disaster events can also result from man-made or external causes. 

A bridge suddenly collapsing after being struck by a barge is an example of a catastrophic failure 

from an external cause.

While the primary purpose of ER funds is to repair the damage caused by the disaster, certain TIMrelated services may be eligible. Among the eligible costs for ER funding are Transportation System 

Management (TSM) strategies. This can include efforts to monitor and control traffic and to manage 

transportation on streets and highways during and immediately following a disaster to restore 

traffic. The elements of a TSM plan may include highway advisory radio, closed circuit television, 

video image process surveillance, installation of changeable message signs, a public awareness 

program, etc. 

ER funds are eligible to provide emergency traffic management services by the police during 

and immediately following a disaster if those services are 1) directly related to the disaster and 2) 

represent added costs above and beyond costs related to normal, day-to-day responsibilities.

ER funds for the costs associated with restoring essential highway traffic, minimizing the extent 

of damage, or protecting the remaining facility, which are incurred in the first 180 days after the 

disaster, are available at a 100 percent Federal share. For permanent repair and costs incurred after 

the first 180 days, the Federal share is based on the type of highway, normally 80 or 90 percent. 
46

The process for ER application normally starts with the Governor issuing a formal disaster 

proclamation. A presidential declaration, or the Governor’s request for the declaration, can serve 

the same purpose. The State transportation agency then works with the FHWA to assess the 

damage and make a determination of eligibility. Further detail on ER funding and the application 

process can be found at: http://www.fhwa.dot.gov/programadmin/erelief.cfm.

FEMA Disaster Relief Program: Recovering costs through either the FHWA Emergency Relief 

or FEMA Disaster Relief program requires good cost management to be in place, especially the 

ability to track costs related to a particular declared disaster. Having charge codes in place to track 

personnel, equipment, or other related costs is a prerequisite to being able to seek reimbursement 

for these costs.

Federal assistance for public roads not covered by the FHWA’s ER program is available through the 

disaster relief program administered by FEMA under the Stafford Disaster Relief and Emergency 

Assistance Act. FEMA funding is available for those events where the focus is on non-Federal-aid 

highways. 

The process for FEMA assistance also starts a presidential declaration, or the Governor’s request 

for the declaration, that there is a major disaster. Application is through the Governor’s Authorized 

Representative, normally the State emergency management agency. The Federal share is normally 

75 percent, however during immediate response, often the Federal Government covers 100 percent 

of the TIM Operations cost during immediate life-saving, life-sustaining operations. This includes 

moving people out of danger via evacuation and clearing roads. 
Credit: iStockphoto Credit: iStockphoto Credit: iStockphoto
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Chapter 6. Plannin g for Operations

The pressures of a rapidly changing world now require that we optimize the use of our existing and 

planned transportation infrastructure. Planning for operations provides a foundation for explicitly 

developing TIM goals, objectives, strategies, processes, and opportunities for integration with 

broader regional operations and safety initiatives. Through these activities planners and operators 

will have a better starting point for estimating and evaluating TIM cost implications (capital, 

operational, and support) and revenue options.

The transportation planning process is a forum through which transportation decisions are made. 

Transportation planners develop long-range transportation plans at both the statewide and 

regional levels. Developing long-range plans has been evolving from a traditional process focused 

on large capital projects that increase capacity to a more balanced approach that addresses 

all available strategies to meet increasing transportation demands. The pressures of a rapidly 

changing world now require that we optimize the use of our existing and planned transportation 

infrastructure. Planning for operations provides a foundation for explicitly developing TIM goals, 

objectives, strategies, processes and opportunities for integration with broader regional operations 

and safety initiatives. Through these activities planners and operators will have a better starting 

point for estimating and evaluating TIM cost implications (capital, operational, and support) and 

revenue options. 

SAFETEA-LU included specific requirements for incorporating management and operations 

strategies in statewide and regional transportation plans. FHWA has developed a series of 

publications that discuss how to integrate operations into long-range planning at both the State 

and metropolitan levels. It is important to understand how TIM can and should be part of this 

planning process, and how cost management can play an essential role. 

State long-range transportation plans and metropolitan transportation plans (MTP) provide key 

opportunities for integrating planning with operations through identifying goals and objectives 

that address system management and operations, data sharing opportunities, operational needs 

or strategies, funding opportunities for TIM, and other means. MTPs form the building blocks for 

the State and help local agencies develop operations objectives that direct the ways that managers 

view operational performance and consider integrating operations solutions with investment 

decisions. These decisions in turn support reaching agency operations objectives. By planning for 

and investing in strategies to manage and operate the existing infrastructure, regions can use what 

they have more efficiently and can improve mobility for the public during both daily operations and 

emergencies.

For Transportation Management Areas (TMAs) – urbanized areas with populations greater than 

200,000 – a congestion management process (CMP) is also required. The CMP is an integral part of 

the planning process that informs the MTP. The CMP is intended to address congestion through a 

course of action that provides for effective management and operations based on cooperatively 

developed travel demand reduction and operational management strategies. In corridors where 

incidents are a major contributor to congestion, the CMP may recommend the application of TIM 

strategies as essential to improving the overall performance of the system.

The Strategic Highway Safety Plan should also provide input to the statewide and metropolitan 

plans. SAFETEA-LU established the Highway Safety Improvement Program (HSIP) as a core Federal 

program. A Strategic Highway Safety Plan (SHSP), a major component and requirement of the HSIP, 

is a statewide coordinated safety plan that provides a comprehensive framework for reducing 

highway fatalities and serious injuries on all public roads. It is a data-driven, 4- to 5-year plan that 

is developed by the State DOT in a cooperative process with stakeholders. Incorporating TIM 

strategies into the SHSP can provide appropriate solutions in corridors with high incident rates.
49

Performance measures have become increasingly important factors in the development of 

statewide and metropolitan transportation plans and in the CMP. As a result, analysis tools are vital 

to developing objective assessments of transportation investment and performance. Performance 

measurements are a key means of assessing the effectiveness of the strategies contained in the 

transportation plans.

A sound TIM cost management approach can be an essential tool for performance measurement, 

revealing ways to achieve a more cost-effective level of performance. Cost management and cost 

recovery could even provide opportunities to improve performance without increasing cost. Fully 

understanding the costs associated with TIM is critical to being able to evaluate TIM strategies 

and to determining where TIM stands among all potential strategies when considering which 

investments are most efficient and cost effective. 

All State DOTs engage in planning studies as part of the long-range transportation plan 

development process. These studies may take the form of corridor, small area, or modal studies to 

address a particular part of the transportation system. They provide an analysis of transportation 

system deficiencies and needs and propose potential new investments to meet those needs. These 

studies present a more specific opportunity to include TIM as a potential investment option. While 

the implementation of a TIM program may not eliminate the need to expand the system, the use 

of TIM as a complimentary transportation operations approach does enhance overall roadway 

performance. Showing that TIM can be a cost-effective way to improve overall system performance 

increases the potential of including TIM and other operational improvements either as alternatives 

or, more likely, as complementary strategies for addressing system deficiencies. This can advance 

the possibilities for funding for TIM operations. Being able to provide complete and detailed cost 

data for TIM can be vital to these types of analyses.

The link between the MTP and the transportation improvement program (TIP) is also important. 

The MTP may identify funding sources that can be set aside for projects that will be selected in 

more short-range planning analyses to address congestion and reliability issues. The TIP may 

include short-term projects that directly or indirectly support TIM. Sound data, including cost data, 

is essential to justifying the benefits of TIM investments.

Integrating TIM into Metropolitan and Statewide Transportation Plans

FHWA is currently developing guidance on how to link TIM to the planning process; however the 

financial aspects of this linkage are worth discussing here. The long-range transportation planning 

process can be most effective through collaboration among an appropriate range of stakeholders. 

TIM managers need to be part of that collaborative process. Planners may often be able to supply 

data about where current or future mobility issues will arise, and TIM managers can provide input 

on the operations objectives and strategies they believe would be most effective to implement. 

The following points in the transportation planning process could benefit from the involvement of 

TIM managers.

•	 Alternative Improvement Strategies – Provide TIM Strategies – TIM managers have the opportunity to

suggest operational solutions for the investment decisions that support the objectives. TIM managers

can best give input on the operations strategies that can be most effective in particular situations.

•	 Evaluation & Prioritization of Strategies – Provide TIM Cost Data and Performance Index Information

– TIM managers can provide data that yields a better understanding of the effectiveness of

operational strategies and the advantages in relation to or in complement to other strategies.
50

•	 Development of the Statewide/Metropolitan Transportation Plan – Provide Support for

Consideration of TIM – TIM managers can provide supporting information during the process for

inclusion of policies, goals, objectives, and strategies that facilitate TIM. Resulting MTPs should be

the proper mix of capital and operational projects to optimize system performance within the fiscally

constrained plan.

•	 Project Development – Provide TIM Project Detail – TIM managers can provide detailed information

necessary for project development.

•	 Systems Operations – Operate the System – TIM managers can operate their program.

•	 Monitor System Performance – Track Performance Measures - Performance measurements are a key

means of assessing the effectiveness of the strategies. TIM managers need to provide input to system

performance.

Figure 19 – The Transportation Planning Process24

24 Federal Highway Administration, The Transportation Planning Process, A Briefing Book for Transportation Decisionmakers, 

Officials, and Staff, FHWA-HEP-07-039 (Washington, DC: September 2007). Available at:

http://www.planning.dot.gov/documents/briefingbook/bbook.htm

Regional Vision and Goals

Alternative Improvement Strategies

Operations Capital

Evaluation & Prioritization

of Strategies

Development of Transportation

Plan (LRP)

Development of Transportation

Improvement Programs (S/TIP)

Project Development

System Operations (Implementation)

Monitor System Performance (Data)

Safety

Non-Discriminatio

n

Air Q

u

ality

Envi or

nmen at l sI

us es CRITICAL FACTORS AND INPUTS

CRITICAL FACTORS AND INPUTS

F

E

E

D

B

A

C

K

F

E

E

D

B

A

C

K

E oc n

mo

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Deve ol pment

Public nI volvement Data

Fiscal Constraints
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Inclusion of TIM Projects or Programs in the Transportation 

Improvement Program (TIP)

The statewide or regional transportation improvement program (TIP) may include projects that 

address the operational objectives and strategies in the long-range transportation plan. The TIP 

is based on the MTP and includes all transportation projects from the MTP that a region plans to 

undertake over a 4-year period. The TIP is more realistic, given the available Federal, State, and 

local funding; is approved by the MPO and the governor; and is incorporated directly into the 

Statewide Transportation Improvement Program. 

Consideration of TIM projects in the TIP should be a direct extension of the process to integrate TIM 

into long-range transportation plans. TIP projects are drawn from the long-range plan or included 

to implement a strategy identified in the plan. It is critical for TIM managers to be involved in the 

transportation planning process to facilitate the consideration of Federal funding in the TIP for TIM 

projects or line items. It may be advantageous to educate the TIP committee or decisionmaking 

body on the merits of the TIM projects. 

If the proposed TIM projects or line items relate specifically to an urbanized area of the State, 

they will need to be considered in the regional TIP within the MPO designated for that region. 

TIM projects that apply statewide or in non-urbanized areas of the State will normally need to be 

considered in the statewide TIP by the State transportation agency.

TIM operational costs or related capital costs may be included in the TIP as a line item or specific 

project. Their inclusion is based on funding eligibility and available funding. Funding is generally 

provided at an 80 percent Federal share. The following Federal-aid categories include eligibility for 

TIM related costs:

Congestion Mitigation and Air Quality (CMAQ)

Purpose: Provides funding for projects and programs in air quality 

nonattainment and maintenance areas for ozone, carbon monoxide, and 

particulate matter which reduce transportation-related emissions.

Specific Eligibility: Traffic management/monitoring/congestion relief strategies.

National Highway System (NHS)

Purpose: Provides funding for improvements to rural 

and urban roads that are part of the NHS.

Specific Eligibility: Capital and operating costs for traffic monitoring, 

management, and control facilities and programs.
52

Surface Transportation Program (STP)

Purpose: Provides flexible funding that may be used by States 

and localities for projects on any Federal-aid highway.

Specific Eligibility: Capital and operating costs for traffic monitoring, 

management, and control facilities and programs.

The competition for available TIP funding makes decisions on project inclusion extremely difficult. 

This reinforces the need for TIM managers to be involved in the transportation planning process, for 

a solid for cost management process, and for using performance measures for TIM.

Creating Local Line Items

Regardless of a local jurisdiction’s cost recovery process, including a line item in an agency or city/

county budget can be helpful as a cost management tool. A TIM line item is an excellent way for 

administrators, elected officials, and the general public to account for and acknowledge the cost of 

TIM services so they can be measured against the benefits they bring to the community. It can also 

motivate those involved in the tracking process to provide an accurate account of the appropriate 

costs. This can facilitate decisionmaking by State and local leaders.

From an administrative perspective, including a well-justified line item in the budget clearly states 

the anticipated costs of TIM services and ensures that policy makers recognize the costs of such 

services. Accurately categorizing and forecasting costs will reduce unexpected expenditures. A 

TIM line item is a natural next step from cost tracking because it only requires analyzing the data 

collected, estimating changes to individual items, and presenting the results.

An agency’s process for formulating a line item will vary, but the ability to develop a rational 

forecast will depend on the level of detail within the cost information that the agency currently 

collects. At a minimum, an agency can modify its current-year expenses by applying an inflation 

adjustment. If the detail is available, a better forecast can be made based on trends extrapolated 

from the number of events responded to and the cost of providing the response. More detailed line 

items may include several cost categories as well as indicators of future costs. For example, a line 

item may include overtime and regular hours as well as fuel, equipment, administrative overhead, 

and any other costs. Predictions for these costs for the upcoming year could incorporate historical 

trends of costs and events and the effects of any policy changes towards TIM. Performance 

measures developed for the transportation planning process may be a critical input to this process.

The use of a budgetary line item is not only a sound cost management tool, it is also imperative for 

justifying additional resources for TIM programs.
Credit: iStockphoto Credit: iStockphoto Credit: iStockphoto
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Chapter 7. Closin g Thou ghts

Overall, the research conducted for this publication did not reveal a practice of managing and 

recovering costs associated with traffic incident management across any of the TIM disciplines. 

However, in reviewing the current status of TIM programs across the Nation, the topic of TIM cost 

management and cost recovery is and will soon become critically important to all TIM stakeholders. 

This document offers a road map with potential solutions for the TIM community to employ in 

addressing this topic, and FHWA hopes that its contents will encourage a dialog within the TIM 

community about how to pay for this necessary service. 

The community’s needs are easy to define:

•	 Volunteer and career fire departments face decreasing property tax revenue and increasing safety

costs associated with training and equipment;

•	 Law enforcement agencies face reduced funding for staff and support systems and increased

numbers of reportable crimes not associated with TIM;

•	 EMS must deal with an aging population that, when transported, often costs more than is permissibly

reimbursable through insurance or Medicare, affecting these services’ ability to sustain their function

and reducing the resources available to respond. Fewer resources available results in a reduced

ability to provide service during the “golden hour”;

•	 The future of transportation funding at all levels of government is uncertain, and traditional sources

of money may not be available in the future. This will require agencies to reevaluate the benefit of

services offered in a constant and ongoing manner;

•	 Towing and recovery operators continue to face new safety and equipment costs while trying to

maintain competitive rates that allow them to stay in business; and

•	 Considerable pressure exists for all organizations to make their operational, tactical, and strategic

processes more efficient and effective.

However, there are some things that the TIM community can continue to do to help identify 

solutions to these and other TIM challenges.

Continue to Make the Case for TIM

The transportation landscape is changing very quickly as the traveling public’s mobility demands 

sharpen and tolerance for delay diminishes. It is likely that the visibility for TIM will continue to 

become more prevalent. It is already becoming a major focus related to the freight industry. 

Freight Analysis Framework projections show that freight movement will increase by more than 

60 percent by 2040. With these increases, maintaining system performance for goods movement 

by truck will be a major challenge. Shippers will demand that the roads be cleared of incidents as 

quickly as possible (as will those receiving the goods, whether manufacturers or retail outlets) – for 

simple economic reasons. 

The question will be whether TIM budgets will be sufficient to increase their operations consistent 

with the anticipated growth in the need for TIM. Federal transportation revenues have not 

increased given that the Federal gas tax rate has not changed since the 1993. Although there 

have been some increases at State levels, State revenue sources likewise have not kept pace. 
55

Further, even though operations have become mainstreamed, operations still needs to compete 

with infrastructure for an ever decreasing pot of funds. This is exacerbated by the fact that 

operations are labor intensive and are therefore costly to run. For TIM, however, which requires 

not just significant labor resources but also costly specialized equipment and specialized operator 

and responder training, State DOTs may view continued funding for TIM programs with more 

reservations than other operations components. 

As a result, there will be a continuing need for collaboration between MPOs and DOTs on TIM along 

with all transportation operations strategies as an alternative to the ever more expensive planning 

and construction of new capacity. Collaboration will need to be directed towards developing 

operations objectives that take into account operations performance during the planning 

process and incorporating operations solutions into investment decisions that support identified 

operations objectives.

TIM practitioners understand that TIM provides a good value for expenditures; however, the 

planning process will require that the case for TIM be documented in performance measures. 

Calculating these performance measures will require a new level of information only available 

through cost management activities. 

Conduct Pilot Projects

One way to gain real world experience, particularly in the area of cost management, is for one or 

more State transportation agencies to undertake focused pilot projects to test these concepts. This 

would allow for dedicated and purposeful tests that would address individual elements of cost 

management. 

The focus would be on one or more of the different phases of cost management:

•	 Cost planning – how good tracking and analysis can aid in estimating future costs and budgets;

•	 Cost tracking – how transparent the process can be for better cost data tracking;

•	 Cost analysis – create cost information across a range of measures that can be used in planning,

evaluating and decisions; and

•	 Evaluation and decision – how the process can support future programming and resource allocation.

These pilot projects could test how well cost management can be integrated into an agency’s 

processes or identify the benefits of implementing these ideas and provide success stories that can 

be further communicated through the industry. The pilots would provide the practical experience 

necessary to gain acceptance within and among agencies. Multiple pilot projects could address the 

most significant aspects of cost management:

•	 Asset management – illustrates howTIM cost data could be used in an agency’s overall management

of assets;

•	 Resource management – promotes a fuller understanding of costs associated with personnel;

•	 Performance management – demonstrates the establishment of TIM performance measures and the

cost data inputs to those measures; and

•	 Visualization – provides illustrative tools to make the message better understood by various

audiences.
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Dissemination of Research and Lessons Learned Information

This primer was undertaken to share the concepts of cost management and cost recovery, but 

without the existence of a deeply ingrained practice in this area, for the most part, it presents 

model policies driven by best practices in related areas. An important observation is that State 

transportation agencies adopt innovations over time, and different parts of an organization do 

not adopt an innovation simultaneously. As with other new methods, agencies can expect cost 

management and cost recovery techniques to continue to become more important over time.

Practitioners, especially TIM mid-level managers, should consider adopting policies and 

incorporating the lessons presented in this primer. Readers are encouraged to visit the primary 

sources for information about the principles of TIM cost management and cost recovery to obtain 

detailed information on related issues:

•	 The FHWA Office of Operations (http://ops.fhwa.dot.gov/), which has a mission to advance the

operational practices and capabilities of State transportation agencies. The FHWA will continue

to advance these concepts to the TIM community through future training, workshops, and other

outreach activities.

•	 The National Traffic Incident Management Coalition (www.transportation.org/Default.

aspx?SiteID=41), which includes representatives from many of the industry groups that can

disseminate the information to a broad audience.

Additional Research

The subject of cost management and cost recovery could benefit from additional research in areas 

such as:

•	 Minimum standards for cost management – this project would identify a minimum set of parameters

that are necessary to have a good cost management process for TIM. Items would include the specific

cost tracking datasets that are necessary and the range of cost analysis tools that could be used to

create the cost information that is most valuable to a transportation department. A useful product

would be a basic template for cost management similar to a project planning checklist.

•	 Strategies for visualization – this project would involve developing simple tools that a TIM manager

could employ to present TIM cost management data to agency officials or political leaders to make

the case for the value of TIM. These tools would assist in displaying key information for use in asset

management, resource utilization, and performance measurement.
U.S. Department of Transportation

Federal Highway Administration

Office of Operations

1200 New Jersey Avenue, SE

Washington, D.C. 20590

March 2012

FHWA-HOP-12-044