Talking Michigan Transportation

MDOT’s new chief administrative officer takes on a road user charge project

• Michigan Department of Transportation • Season 8 • Episode 254

Share episode

On this week’s Talking Michigan Transportation podcast, a conversation with the new chief administrative officer at the Michigan Department of Transportation (MDOT) about his role and his first big challenge, overseeing a legislatively mandated study and pilot of a road user charge (RUC) program.

Paul McDonald joined the department in November, coming from the Michigan Department of Environment, Great Lakes and Energy (EGLE). He talks about his perceptions of transportation coming into the department, and what his new portfolio includes.

This week, he chaired the first meeting of the Technical Advisory Committee, made up of people both inside and outside government who will offer expertise as the process moves forward.

Jeff Cranson:

Hello, welcome to the Talking Michigan Transportation Podcast. I'm Jeff Cranson. This week I was pleased to speak with Paul McDonald, who is the incoming Chief Administrative Officer at MDOT. He succeeds Laura Mester, who I spoke to on the podcast a few weeks back because she's retiring after a long and very productive career in state government. Paul came over from Eagle, which is the Department of Environment, Great Lakes, and Energy. And he has a lot of experience in state government. And so far, um, in just the few weeks he's been uh on the job shadowing Laura. He's uh already demonstrated keen problem-solving skills, and he's taking on uh a big challenge uh overseeing the formation of a technical advisory committee for a road user charge study and pilot, which was mandated legislation from last year. That group had their first meeting this week, and I wanted to talk to him about his perceptions coming out of that and what needs to happen next as they issue requests for proposals for a consulting firm to manage that study and that pilot and that process of educating the public about what this will mean. So I hope you enjoy the conversation. So, Paul McDonald, as I mentioned, is the new chief administrative officer at MDOT. He has been sort of shadowing outgoing CAO Laura Mester, who was on the podcast a couple of months ago to talk about her next chapter and what she found. Paul, thank you for taking time for this first appearance on the podcast. Thank you, Jeff. I appreciate the opportunity. So let's talk first about your perceptions of the department as somebody who's been in state government for a while, but working at the over the years changes names. Most recently it's the uh environmental Great Lakes and Energy Department. Um, Eagle. Before that, it was DQ. And uh, well, we could get into a lot of history there. But coming over to MDAT, what were your perceptions of the department and what so far have you found that that bore that out and and and maybe that surprised you?

SPEAKER_00:

Yeah, and I you forgot, Jeff, um, the uh infamous DNRE that existed for a whole six months, too. So that all that was yeah, that was an exciting time too. So um, no, and and honestly, uh, you know, as you mentioned, um, spent the previous 10 and a half years at Eagle. Um, honestly, I thought I was gonna retire there. Um, you know, had a few opportunities over the years to to spread my wings and go elsewhere, but really enjoyed it. And um, when this opportunity to, you know, come in and try and replace Laura uh presented itself, it's it's one department that I saw myself potentially going to. And and part of that was interactions working with the department, you know, whether it was the Nevi program, um, or or other, you know, related interactions between um Eagle and MDOT. Always found the the people pleasant to work with, knowledgeable, and incredibly passionate towards you know the infrastructure within the the state.

Jeff Cranson:

Nevi is the the National Electric Vehicle Infrastructure Program. Program.

SPEAKER_00:

Yep. Sorry about that. I uh get caught up in those those acronyms as well. Um, but you know, those perceptions have just been you know reinforced in in my short two months here, you know, so far. Um, the passion is uh um astounding, the intelligence is you know prevalent in in the people that I've interacted with, and you know, all focused towards that one goal of whether it's improving the infrastructure, the transportation options, you know, integration from rural to urban, um, you know, always looking for the improvement and being incredible stewards of the state taxpayer dollars.

Jeff Cranson:

So you forged those relationships and you kind of already saw uh the, I guess, kind of the culture of the department, the tenor of the department, like you said, a lot of people that are passionate. Sometimes eagle and m dot uh, you know, kind of uh butt heads on things. And I'm guessing that it was because of your understanding of the department that you were probably able to uh help, you know, with some accord uh to get people on the same page. Is that fair to say?

SPEAKER_00:

That is an absolute fair statement. And and you know, and it is challenging when you have two departments that have unique responsibilities, um, all can see that end goal, but they have those individual responsibilities, you know. And with Eagle, it's you know, it's the regulation and and enforcement of public protection. And so what was enjoyable about those interactions being from the other side is is trying to get to that end result, right? And and be able to check those boxes both for Eagle or or M Dot. But um, you know, it before I I left, uh, some of my partners and and comrades over there uh made me promise I wouldn't share any of uh you know their secrets and and make it a little easier for mdot to uh get past some of those hurdles.

Jeff Cranson:

So that's funny. That's funny because so many people, members of the public and business owners and lawmakers think that mdot is this big regulatory agency, but really uh more often than not, mdot is seeking permits to do the work that they need to do. So yes, absolutely.

SPEAKER_00:

And and I can I can say again, been here just a little over two months. Um, you know, still have a lot to learn, but being a regulatory agency isn't uh apparent as much here as it is predominantly, you know, at Eagle. It's a it's a day-to-day um occurrence and part of every single process there.

Jeff Cranson:

So you took this job, eyes wide open, you knew what you were getting into. There's a lot under your umbrella. Um, CAO might say to some people, well, that's just chief administrative officer, probably sounds like a lot of accounting and finance. Well, that is a piece of it, but that's not all of it. So talk about what all is is in your portfolio.

SPEAKER_00:

Sure, absolutely. And you know, as you indicated, um obviously the budget and finance piece is a is a pretty big part of that, and you know, puts um our programs in a position to be able to spend and and work towards those programs every year. But you know, there's there's quite a few other um important behind the scenes branches as well. And first is you know, enterprise information management um office, you know, really uh helping every program and employee within them. Whether it's from cell phone usage, you know, laptop, or more importantly, the databases and information that we're sharing. You know, a pretty big project that they're um working towards is creating a platform, if you will, where data, regardless of what um database it's in, can be shared across the board, putting us in better positions to make management decisions. Yeah. Um, that's and that's just another piece. Yeah, it's just uh just a small piece. Um, Andy Esh will will probably uh you know kick me under the table next time. And I say small piece, it's considered a five to a 10-year project. It's that involved and and that complicated, but it's important enough to you know continue down that path. But on top of of those three areas, um, the International Bridge Authority, so the the bridge connecting um the Sioux on both sides of the US and and Canada is in my portfolio. Um, and then quite frankly, the the modes as I refer to them. So the planes, trains, and uh, you know, buses. So um whether it's office of rail, office of prank uh passenger transportation, or aeronautics, um, those three areas are there as well and and um have a significant a lot or significant amount to to learn in those areas, but also um pretty excited about diving in and seeing what we can do to move those programs forward.

Jeff Cranson:

Yeah, and that's uh that that's that's a challenge because um a lot of what they do is pass through money and they're not in a position necessarily to advocate for some of the programs. And a lot of the the people, the various agencies, um, and certainly lawmakers don't always understand that what what a limited role we have with the modes. Um and when you talk about passionate people in the department, uh the people that work in those areas uh are among the tops. They really care a great deal about those things and you know, doing what they can to serve the public so that everybody has mobility, but also to protect the taxpayer and and spend those dollars wisely.

SPEAKER_00:

Absolutely. And and I think Jeff, you hit it right on the head. It a lot of it comes down to education, right? Whether it's um connecting um passenger transportation between you know cities, whether it's in the the UP or or in you know southeast or southwest Michigan, there's a lot of opportunities there if we invest in it. And hopefully, you know, the new road funding package will provide some of those areas with a little bit of more capacity to be able to connect those systems, yeah. Passenger rail, bus transportation, and you know who knows how long it'll take, but um, perhaps uh personalized drone transportation from place to place, right? So um all exciting, and yep, yeah, pretty soon the Jetsons will be real.

Jeff Cranson:

Yeah, absolutely. Um, people used to talk about that often. Uh they make that comparison. We talk about automated vehicles, and the biggest uh I think anyway, what I what I've talked about over the years and advocated for when it comes to automated vehicles are the safety features that because computers really are better drivers than humans, whether we want to admit it or not, they don't have all the flaws that humans have that cause crashes. But there were crashes in the Jetsons, so those those flying cars were not free of running into each other. Sure. Please stay tuned. We'll be back with more talking Michigan transportation right after this.

SPEAKER_02:

If you're enjoying today's Talking Michigan Transportation podcast and would like to learn more about some of the exciting innovations going on at the Michigan Department of Transportation, check out the MDOT YouTube channel for videos featuring project updates, safety initiatives, and program highlights. Go to youtube.com slash Michigan DOT and subscribe.

Jeff Cranson:

So let's talk uh about your first really big task. You arrived just in time to take on this legislative mandated uh process to have a study and pilot of a road user charge program, um, which has been piloted in some other states. Uh no state actually has a program in place entirely. Some are very tailored, very unique. Obviously, Hawaii, we talk about a lot. But your first task was to help get this RFP out the door. Um, how soon can we expect that request for proposal to be out there for a consultant to help manage this program?

SPEAKER_00:

Yep. So we're we're putting the final touches um on that. And the hope is in the the next two weeks um that RFP will be on the street. Um, we expect um that it'll be open for submission for about five weeks, and then uh a group of us, so three members from MDOT and then three from the technical advisory committee will join forces to review those and select the ultimate um awardee of that RFP. And that's when the real work you know will begin.

Jeff Cranson:

Yeah, and so yesterday, Tuesday, January 27th, was the first meeting of this uh technical advisory committee. It's uh it's not a policy-making body, it's not a lawmaking body. Um, but it it's part of the process so that we've got technical advisors as we go through this. Um, a lot of the work is gonna be uh pretty in the weeds and pretty tedious, but um, as we expected, there's a lot of misunderstanding out there. People think that this is the group that's gonna be making the decisions about uh eventually having a road user charge system in place. That's really not what this is all about. So talk about the challenge of of trying to work through this and explain it and just say, you know, I'm I'm I'm sorry to to media and others that that want to find some great controversial story here, but this is a lot of boring process, really.

SPEAKER_00:

It it is, and I I think probably the biggest misconception is the fact that m dot will will make a decision at the end of this and just make it happen, snap our fingers, and and really, you know, what the task on hand is is grabbing information um that will be presented to the legislature that they may or may not use in the implementation of potential law changes on how road funding you know occurs in the future. It and while that data information and down in the weeds um is a big part of it, probably the biggest part, Jeff, is education, communication um with the the residents that you know may be affected by this, should this come to a reality after the study is presented to the legislature. And and what I mean by that is you know, the misconception that you know a road user charge is is gonna cost some people more money or less, or it's targeting just EVs. Um, really what it what it looks at is a decades-old model that was based on vehicle usage that had very limited um difference from one vehicle to the next, all within five or ten miles per gallon, you know, rate. And now you have vehicles that are high efficiency, you know, in the 35-40 miles of the gallon, you have hybrids, you have full EVs, and you still have those. You know, I I grew up in the thumb, I can guarantee there's still a 1980s uh pickup driving around somewhere there getting six miles to the gallon. But you know, that the concept of a ruck or a road user charge is looking at the usage, so the miles driven by an individual, and so it's more fair and equitably, you know, dispersed amongst the residents of the state.

Jeff Cranson:

Yeah, well, that's the the big thing is that people are surprised. You've heard these stories many times. Uh, Denise Donahue, who's a member of this technical advisory committee and heads up the County Road Association, they've been looking at this for a long time, um, largely out of a concern about what electric vehicles are going to mean to uh what we take in in revenue. But there's that misconception by so many people that um I'm gonna pay more. And when you explain to them how it works and they find out no, you might actually not pay more, they they turn around, but you can't talk to all 10 million people in the state one at a time. So yeah, yeah.

SPEAKER_00:

And that's why you know, even the pilot that we have, and again, I don't have a great understanding on the number until we get the consultant in and understand you know the hurdles are there. I don't expect the pilot to be more than 2,000 people. Well, that's a pretty small sample size of the state of Michigan, you know, residents that are here. But where the big efforts will become is the communication and education will be for everyone, right? Whether it's sitting at a booth at a county fair or holding a um a citywide, you know, meeting or a town hall um in you know, the UP. It's about educating the residents so they understand what this means. And yes, it there's the possibility that there may be some users that pay more than others or goes up and down, but again, fully dependent, the theory behind it, fully dependent on the number of miles or the usage of the roads that is occurring.

Jeff Cranson:

Yeah, there's an old cartoon, um, political cartoon goes back years. Um, I don't remember what it was, it might have been in Doonsbury, but it uh it was a couple guys sitting around outside of uh a legislative chamber and looking at a tax bill and saying, wait a minute, this bill is actually gonna tax the people uh who use the services. And uh so that's that's what this is all about, right? This is this is road user charges. Like this is why I've always been interested in tolling, which I thought we would get to before we actually got to road user charges, but the people who use the road should pay for the roads. It seems pretty logical.

SPEAKER_00:

It it does seem fairly logical, right? Um, and I I know it's hard um probably for some people to realize that their costs may go up, but if you're using the service more than your neighbor, it shouldn't be an equivalent assessment between the two of you.

Jeff Cranson:

Yeah, right. It's just if you had a meter, just like you do for your electricity or your natural gas, then you would know. And and that's why the gas tax worked for more than a hundred years. That was a very effective way. It was a it was a good measure, and it's a good thing that we're driving more fuel efficient cars. That's good for the environment, it's good for our carbon footprint, everything about it. But we still need the pavement and the bridges.

SPEAKER_00:

And unfortunately, what we could buy with a dollar 50 years ago isn't the same that we can you know purchase with a dollar today. Um, everybody knows that, you know, they they walk into a grocery store and they they see that impact. And so, to your point, the the encouragement is towards more fuel efficiency, whether it's um regular uh gas using vehicles, you know, hybrids or EVs and reducing that carbon footprint. But at the same point in time, we need to make sure the the infrastructure has the resources to provide safe modes of transportation.

Jeff Cranson:

Yeah, I mean you're talking about the gas tax, right? What costs the same now as it did 40 years ago, but it hasn't been raised. I always thought if I testified before Congress, I would tell them, hey, you know, I'm a skier and I went to Boyne Mountain and I told them I want to pay a 1984 price for a lift ticket. How did that go for you? Yeah, yeah. Now well. So yeah, it's a it's a hard point to make. So you didn't really have any, I mean, you didn't have to do this at Eagle. You weren't out um trying to educate the public and lawmakers about funding and how you guys do what you do. I mean, there might have been some element of it, but you didn't really have a user fee model like like we do for all citizens, right? So is this kind of new to you, this idea that you've got to help educate the public about how we fund our infrastructure?

SPEAKER_00:

I mean, probably to this scale, yes. But you know, Eagle has 45, 46 different fees and licenses and permits. And so any type uh or any time that you would end up in a scenario where revenues weren't meeting you know, demand or or need, that education in conversation would always need to occur, much smaller scale, right? So, you know, whether you're you're you're talking about um scrap tire haulers, whether you're talking about um city uh water maintenance folks or or what have you, um, the education was always there, but definitely not this um far-reaching and not this commonplace, you know, for every resident, you know, whether it was businesses or um cities or governments, um, concept was there, just a much bigger scale.

Jeff Cranson:

Yeah. Well, I guess you were dealing with people who probably didn't think that they should have to get that permit in the first place. So they certainly don't want the price to go up.

SPEAKER_00:

100%, you know, and also dealing with um, we need to, you know, replace your 65 year old water main, and it means that your water bill is going to go up to pay for it. Um, they definitely want the safer water main, but never want to have to pay for the actual infrastructure to deliver it. So yeah, that may.

Jeff Cranson:

A lot of sense. So so when you talk about the the communication, and that's going to be a big part of the consultant that's that's chosen for this, and they'll they'll be closely watched. There'll be a lot of oversight from MDOT as they go through this process. Do you have any sense of of a timeline, how long that might all take?

SPEAKER_00:

You know, and the other thing I wanted to flag in here, I focused in a lot on the education of the the residents and people that'll be using this. I don't want to leave out um, we have a very strong desire to pull in some um legislative uh persons to part of the pilot and test too, because I think it's important for them to experience you know some of the options and the unspeakable.

Jeff Cranson:

That's a very good point.

SPEAKER_00:

Yes. Um, but you know, as far as timeline, it it's tough to say until we sit down and and meet with uh the consultant, but looking at what some other states have done and how long it's taken to do a study, kind of get that first initial report, um, thinking it'll probably be a two-year process from start to end. So as far as you know, getting it set up and you know, the other challenges is coming in and not having a preconceived notion and how you gather data, right? So if we're talking about how many miles um a person has driven, how do you gather that data? Is it you know, telematics, is it using an app, is it someone taking a screenshot on their phone and sending it in? Or you know, there are other states, and I'm not saying this is what would happen, but other states have a vehicle inspection that occurs every year where they go to their you know department of state to renew their vehicle and we almost did in the night list.

Jeff Cranson:

Remember? Yeah, it was it was very close. And uh yeah, at the time uh the administration uh pulled the plug on at the last minute, but they were already building the inspection facilities around the state.

SPEAKER_00:

I was not aware of that, but you know, there's just there's a lot of different opportunities there, and so it it'll take time to set those up and and work through um you know the bumps and bruises along the way, and and again, having to educate those that are even in the pilot study of of how to do that effectively and what it means.

Jeff Cranson:

Yeah, no, it's exciting. We've got some some very passionate uh advocates uh in the legislature and in the broader transportation community, and then we know that there are people whose uh inertia will be to oppose this because every time a media outlet does a story, they go to a gas station and ask somebody standing there pumping gas, and they almost always say, Well, no, you know, it's a yep, it's and that is the challenge with the education.

SPEAKER_00:

But I I do agree with you, and some people you know may think I'm crazy. I I am excited about this, right? Anytime that you have an opportunity in your career to potentially affect something that's been in place for a hundred years or more and and change it potentially for the better to make it more fair and equitable to the current environment, that's an exciting opportunity. Now, you know, maybe every day won't feel that that same way when some uh obstacles present themselves, but overall, this is this is exciting. And again, you know, hope that the information that we gather and present to the legislature, you know, paints a picture for new opportunities.

Jeff Cranson:

Yeah. Well, I I think uh you've obviously hit the ground running, and it's gonna be uh really interesting to talk to you further as as we move along. So thanks very much for uh sharing your both your personal background and uh and what your feelings are as you take on this big challenge with the road user charge pilot and study. It's I guess study slash pilot is the best way to put it. Yes, it is. Thank you, Jeff.

SPEAKER_00:

I appreciate the opportunity.

Jeff Cranson:

I'd like to thank you once more for tuning in to Talking Michigan Transportation. You can find show notes and more on Apple Podcasts or BuzzSprout. I also want to acknowledge the talented people who help make this a reality each week, starting with Randy Devler, who skillfully edits the audio, Jesse Ball, who proofs the content, Courtney Bates, who posts the podcast to various platforms, and Jackie Salinas, who transcribes the audio to make it accessible to all.