    [Senate Hearing 113-468]
    [From the U.S. Government Publishing Office]

                                                            S. Hrg. 113-468

         BRINGING OUR TRANSIT INFRASTRUCTURE TO A STATE OF GOOD REPAIR

    =======================================================================

                                    HEARING

                                   before the

                                SUBCOMMITTEE ON
               HOUSING, TRANSPORTATION, AND COMMUNITY DEVELOPMENT

                                     of the

                                  COMMITTEE ON
                       BANKING,HOUSING,AND URBAN AFFAIRS
                              UNITED STATES SENATE

                        ONE HUNDRED THIRTEENTH CONGRESS

                                 SECOND SESSION

                                       ON

       EXAMINING THE STATE-OF-GOOD-REPAIR NEEDS OF THE NATION'S TRANSIT
         INFRASTRUCTURE, AND THE FEDERAL ROLE IN ADDRESSING THESE NEEDS

                                   __________

                                  MAY 22, 2014

                                   __________

      Printed for the use of the Committee on Banking, Housing, and Urban
                                    Affairs

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                COMMITTEE ON BANKING, HOUSING, AND URBAN AFFAIRS

                      TIM JOHNSON, South Dakota, Chairman

    JACK REED, Rhode Island              MIKE CRAPO, Idaho
    CHARLES E. SCHUMER, New York         RICHARD C. SHELBY, Alabama
    ROBERT MENENDEZ, New Jersey          BOB CORKER, Tennessee
    SHERROD BROWN, Ohio                  DAVID VITTER, Louisiana
    JON TESTER, Montana                  MIKE JOHANNS, Nebraska
    MARK R. WARNER, Virginia             PATRICK J. TOOMEY, Pennsylvania
    JEFF MERKLEY, Oregon                 MARK KIRK, Illinois
    KAY HAGAN, North Carolina            JERRY MORAN, Kansas
    JOE MANCHIN III, West Virginia       TOM COBURN, Oklahoma
    ELIZABETH WARREN, Massachusetts      DEAN HELLER, Nevada
    HEIDI HEITKAMP, North Dakota

                           Charles Yi, Staff Director

                    Gregg Richard, Republican Staff Director

                           Dawn Ratliff, Chief Clerk

                           Taylor Reed, Hearing Clerk

                          Shelvin Simmons, IT Director

                              Jim Crowell, Editor

                                     ______

       Subcommittee on Housing, Transportation, and Community Development

                     ROBERT MENENDEZ, New Jersey, Chairman

                 JERRY MORAN, Kansas, Ranking Republican Member

    JACK REED, Rhode Island              BOB CORKER, Tennessee
    CHARLES E. SCHUMER, New York         PATRICK J. TOOMEY, Pennsylvania
    SHERROD BROWN, Ohio                  MARK KIRK, Illinois
    JEFF MERKLEY, Oregon                 TOM COBURN, Oklahoma
    JOE MANCHIN III, West Virginia       DEAN HELLER, Nevada
    ELIZABETH WARREN, Massachusetts      RICHARD C. SHELBY, Alabama
    HEIDI HEITKAMP, North Dakota

                  Brian Chernoff, Subcommittee Staff Director

             William Ruder, Republican Subcommittee Staff Director

                     Jackie Schmitz,  Legislative Assistant

                   Homer Carlisle,  Professional Staff Member

              Rachel Johnson, Republican Professional Staff Member

                                      (ii)

                                C O N T E N T S

                                  ----------

                             THURSDAY, MAY 22, 2014

                                                                       Page

    Opening statement of Chairman Menendez...........................     1

                                   WITNESSES

    Dorval Carter, Chief Counsel, Federal Transit Administration.....     2
        Prepared statement...........................................    24
    Joseph M. Casey, General Manager, Southeastern Pennsylvania
      Transportation Authority, Philadelphia, Pennsylvania...........     8
        Prepared statement...........................................    28
    Beverly A. Scott, General Manager and Chief Executive Officer,
      Massachusetts Bay Transportation Authority.....................    10
        Prepared statement...........................................    32
    Gary Thomas, President and Executive Director, Dallas Area Rapid
      Transit........................................................    12
        Prepared statement...........................................    33

                  Additional Material Supplied for the Record

    Statement submitted by Leanne P. Redden, Acting Executive
      Director, Chicago Regional Transportation Authority............    36

                                     (iii)

         BRINGING OUR TRANSIT INFRASTRUCTURE TO A STATE OF GOOD REPAIR

                                  ----------

                             THURSDAY, MAY 22, 2014

                                           U.S. Senate,
          Subcommittee on Housing, Transportation, and
                                 Community Development,
              Committee on Banking, Housing, and Urban Affairs,
                                                        Washington, DC.
        The Subcommittee met at 9:33 a.m., in room SD-538, Dirksen
    Senate Office Building, Hon. Robert Menendez, Chairman of the
    Subcommittee, presiding.

             OPENING STATEMENT OF CHAIRMAN ROBERT MENENDEZ

        Chairman Menendez. Good morning. This hearing of the
    Subcommittee on Housing, Transportation, and Community
    Development is called to order.
        Let me thank our witnesses for being here today to discuss
    what I believe is one of the most important challenges in our
    Federal transportation program. Investing in our transportation
    infrastructure and supporting 10 billion passenger trips every
    year is essential to our mobility, our economic development,
    our air quality, our overall quality of life, our ability to
    create jobs, and our global competitiveness. The benefits of
    investing are clear. The fact is we are not investing enough.
        In 2009, a Federal Transit Administration report found that
    of the seven largest rail systems, including New Jersey
    Transit, and the systems represented by two of our witnesses
    today, SEPTA and MBTA, they had a $50 billion backlog in
    projects--$50 billion just to make sure that the systems were
    in reasonably good condition, not state-of-the-art but
    adequate. And, frankly, to me that is simply unacceptable.
        Investing in our transit systems is not a luxury. It is a
    necessity. It is a win-win-win that creates good, family wage
    jobs. It makes our infrastructure safer, more efficient, more
    reliable, and it keeps us competitive.
        Just recently, my home State of New Jersey received an
    alarming wakeup call. The president of Amtrak announced that
    within 20 years, one or both of the tunnels under the Hudson
    River between New Jersey and New York will need to be shut
    down. Shutting down the Hudson tunnels is unthinkable, and not
    investing in keeping them open is unconscionable. These tunnels
    are over 100 years old, and to make matters worse, they were
    flooded with corrosive salt water during Hurricane Sandy.
    Within 20 years these tunnels will be closed unless we commit
    ourselves to investing in keeping them open.
        According to Amtrak, if one of these tunnels were to close,
    they would have to reduce train traffic from 24 trains an hour
    to 6 trains per hour. That is four Amtrak trains and two New
    Jersey Transit trains per hour.
        For those of you who are not familiar with the commute from
    New Jersey into Manhattan, let me tell you that two transit
    trains an hour is simply not going to cut it. So we go from
    having the ARC project needlessly canceled, which would have
    built a new Hudson tunnel and allow for 48 trains per hour, to
    a future of closed tunnels and 6 trains an hour in the heart of
    the Northeast corridor. That is simply unthinkable.
        Losing the Hudson tunnels is not something our region can
    work around. There is no detour. There is no extra roadway
    capacity for the transit and rail commuters to fall back on. We
    saw it during Sandy when our transit system was inundated. We
    saw it after 9/11 when people relied on ferry boats to travel
    to New Jersey from Manhattan. Without a fully functional,
    multimodal transportation system, the Nation, and New Jersey,
    is simply stuck in gridlock.
        But losing one or both of the Hudson tunnels would mean
    nothing less than the complete crippling of the region and
    would send a terrible signal around the world about American
    competitiveness in the global economy, simply because we are
    unwilling to make the necessary investments in our transit
    system.
        The Hudson River tunnels are the starkest example of our
    failure to invest, but every city and town across the country
    has its own examples. Whether large rail or small bus systems,
    our transit repair needs total about $86 billion, projected by
    the DOT to grow to $142 billion by 2030 if we do not begin to
    invest today.
        At the end of the day, we all understand that investing in
    our infrastructure is not a cheap proposition or politically
    easy in the current atmosphere. But the cost of inaction is
    much, much higher.
        So I look forward to hearing the perspectives of our
    witnesses today, and working with my colleagues both on this
    Committee and as a member of the Finance Committee, we will
    have to find the funding mechanisms to address these
    challenges.
        Let me introduce the first witness of our first panel. Mr.
    Dorval Carter is the Chief Counsel for the Federal Transit
    Administration. In addition to his work at FTA, Mr. Carter
    previously served in senior positions at the Chicago Transit
    Authority, a system with a significant state-of-good-repair
    needs. I look forward to hearing his testimony, which comes
    with the great depth and breadth of knowledge and perspective
    of the issue.
        Let me say, Mr. Carter, your full statement will be
    included in the record, without objection. I would ask you to
    try to summarize it in 5 minutes or so, so we can get into a
    dialogue. And, with that, the floor is yours.

      STATEMENT OF DORVAL CARTER, CHIEF COUNSEL, FEDERAL TRANSIT
                             ADMINISTRATION

        Mr. Carter. Thank you, Chairman Menendez, and thank you for
    inviting me here today to discuss our Nation's serious deficit
    in public transportation infrastructure as well as to highlight
    the Obama administration's plan to bring our aging rail and bus
    systems and facilities that support them into a state of good
    repair as part of the GROW AMERICA Act.
        As you stated in your opening remarks, this is a critical
    time for transit. Transit ridership is at its highest level in
    generations, and that trend is likely to continue as the U.S.
    population is expected to increase to approximately 400 million
    by 2050, while growing proportionally older and more urban.
        The caution I bring today is that the foundation we build
    on to meet that demand is already fracturing. Let us be clear.
    Transit remains one of the safest ways to travel, but our aging
    infrastructure carries hidden costs that we cannot and should
    not ignore.
        Our 2013 Conditions and Performance Report finds that the
    backlog in transit maintenance and replacement stands at $86
    billion, a 10-percent increase since 2010. We will need $2.5
    billion more every year from all funding sources just to
    maintain the status quo.
        Today it is State and local governments that are bearing
    the burden, taking on more than half the cost of annual
    spending to preserve and grow the Nation's transit systems.
        The biggest challenge is our rail system, which accounts
    for about 63 percent of the state-of-good-repair backlog, with
    most of that due to assets like rail stations, trestles, power
    substations, and more. These deficiencies have a direct impact
    on riders. They undermine the resiliency of our transit
    systems, and they drain resources that could be better spent on
    timely replacement and expansion.
        That is why state of good repair is fundamental to
    everything that we do at FTA. By providing my testimony here
    today, you are going to be getting a two-for-one opportunity
    because not only do I speak for the Administration, but I also
    speak from the perspective of someone who has worked on the
    ground with a transit agency to keep transit systems in a state
    of good repair.
        As you indicated, Mr. Chairman, I spent half my career at
    the Chicago Transit Authority, which operates one of the oldest
    rail systems in the country. Part of my responsibilities at CTA
    was managing the capital and operating budgets, the procurement
    operations, and the warehousing activities of that agency. From
    that experience, I can tell you that the older a system gets,
    the more challenging the simplest of tasks become.
        For instance, where do you find parts for 100-year-old
    equipment? No one makes them anymore. You cannot get them off
    the shelf. Your options are to either cannibalize existing
    assets or to make the parts yourself. CTA during my tenure had
    done both. When Hurricane Sandy damaged the equally aged PATH
    commuter rail system that operates between New Jersey and New
    York, Chicago was one of the few places that they could turn to
    for replacement parts.
        Let me suggest that we cannot keep transit systems safe and
    reliable with a Craigslist approach. Instead, we need to make
    the right investments to get ahead of the problem and keep us
    there so that we are not always a step behind. That means
    striking a responsible balance between investing in new capital
    construction and preserving and modernizing existing
    infrastructure.
        One of the best tools that we have to prioritize these
    investments is the Transit Asset Management Planning Tool. We
    are grateful to this Committee for making it a requirement as
    part of MAP-21. With better metrics and performance-based
    planning, we can get a more accurate picture of true need,
    enabling local decision makers to allocate limited resources
    more effectively systemwide.
        We used transit assessment management at CTA, and it was an
    invaluable tool. It helped us prioritize unmet capital needs
    and support the argument for public funding. Moreover, it
    provided a road map so that Federal, State, and local funding
    partners knew that we had a concrete plan to use our resources
    efficiently and wisely.
        With your help, we are working to bring those benefits to
    the transit agency nationwide. The latest Condition and
    Performance Reports make the case for sustained investment and
    the GROW AMERICA Act answers. The Administration has put forth
    a plan that builds on the investments made through MAP-21, DOT
    programs, and the American Recovery and Reinvestment Act to
    address our infrastructure backlog. The GROW AMERICA Act is the
    right plan to keep transit safe and reliable now and for future
    generations.
        With that, Mr. Chairman, I conclude my testimony, and I
    will be happy to answer any questions that you may have.
        Chairman Menendez. Well, just to show the efficiency of
    transit, you did not even use your 5 minutes.
        [Laughter.]
        Chairman Menendez. Let me start off with one of the
    critical questions before the Congress, which is the funding
    level of the transportation reauthorization. And so if Federal
    funding remains flat in the coming years, do you believe that
    we can make any progress toward eliminating the $86 billion
    backlog?
        Mr. Carter. No, sir, I do not. Our Conditions and
    Performance Report indicated that we need at least an
    additional $2.5 billion a year from all funding sources just to
    maintain the existing backlog. In order to make any sort of a
    dent in that backlog, you are going to need somewhere around
    the neighborhood of $18.5 billion over a 4-year period to make
    that happen.
        So in order to basically address this problem, we have to
    make significant additional investments in our transit
    infrastructure, and the President's proposal is one of the ways
    in which we believe we can do that.
        Chairman Menendez. So flat funding does not only not meet
    the backlog challenge, I would assume; it will accumulate a
    greater backlog, a greater cost.
        Mr. Carter. That is correct.
        Chairman Menendez. Now, in your testimony you speak to the
    excellent work that FTA has done for years trying to bring
    attention to the state-of-good-repair backlog and discuss the
    importance of the creation of a formula-based state-of-good-
    repair program under MAP-21. And I agree with your assessment
    of the importance of this program, but I know some have
    concerns about the funding increase given in MAP-21 to the
    state of good repair.
        Can you speak to the need for having a strong Federal
    state-of-good-repair system?
        Mr. Carter. Absolutely. If you look at the overall
    percentages for the contributions that the Federal Government
    makes to the issue of state of good repair, we actually only
    provide about 40 percent of the total contribution. The
    remaining 60 percent comes from our State and local
    governmental partners.
        It is critical for all of us, both Federal, State, and
    local, to provide a level of funding that is both reliable and
    sustainable over an extended period of time in order to address
    this backlog. The stopping and starting of these types of funds
    makes it very difficult for transit agencies, both big and
    small, to properly plan for and to address their capital
    backlog needs.
        Chairman Menendez. Are there certain types of modes or
    transit systems that are driving the current backlog?
        Mr. Carter. The rail systems make up approximately 60
    percent of the backlog. That is primarily due to the heavy cost
    of their infrastructure. As you can imagine, replacing power
    substations and rebuilding train stations and things of that
    nature is a significant cost. But I would not want to diminish
    the impact that this issue has on the smaller systems as well.
    As you can imagine, to a small operator in a rural part of the
    country who may only have two or three buses, if one of those
    buses is 20 years old and the ability to properly maintain that
    bus is difficult, resulting in unreliable service, then the
    impact to that operator is just as significant as the impact of
    a crumbling infrastructure would be to a Boston, an MBTA, a New
    York MTA, or a CTA.
        Chairman Menendez. Now, you in your testimony you gave an
    unsettling anecdote, which I know firsthand from my visits with
    Port Authority officials when the PATH in Hoboken, New Jersey,
    was inundated, and they were showing me the circuit breakers
    that are so old that they no longer are manufactured, and you
    mentioned that they had to resort to shipping in ports from
    Chicago.
        Is that an exception? How pervasive is that type of
    challenge throughout the system?
        Mr. Carter. Well, I am sure that the other GMs who will
    speak after me can probably speak to this in more detail than I
    can, but I can tell you from my experience at CTA, the older
    transit systems like Chicago, Philadelphia, Boston, and others
    are dealing with the harsh reality that their infrastructure is
    extremely old, that replacement parts are difficult to find,
    and it is only by luck that we are able to identify scenarios
    like the one that occurred with PATH where there was another
    system, thankfully, that was able to provide those parts on a
    temporary basis while PATH went through the process of really
    having to remanufacture the parts they needed themselves.
        Chairman Menendez. Your testimony notes that more people
    are choosing to live in urban areas where cars are less
    necessary, younger people less reliant on cars than previous
    generations. It seems to me those factors are leading to more
    transit ridership among other elements.
        Could these increasing demands on transit systems result in
    the SGR backlog growing at a faster rate than the $2.5 billion
    increase per year that you currently project? And is there any
    modeling that is going on for these changes in calculating the
    backlog?
        Mr. Carter. Our Condition and Performance Report is based
    on some modeling that we utilize to forecast what we believe
    the reasonable growth in transit would be over a period of
    time. But I think it is safe to say that as demand increases,
    the backlog is going to become more and more of a problem. Our
    models suggest that. I think that as we continue to address
    this problem, we are going to have to deal with the reality of
    both the challenge of providing an adequate level of funding to
    maintain the existing systems while dealing with the expansion
    needs that are required to grow those systems even more.
        Chairman Menendez. Finally, asset management, and I think
    we will hear a little bit more about this from some of our next
    panel. One of the key changes authorized by this Committee in
    MAP-21 was the creation of the transit asset management
    requirement. What work is being done with transit agencies
    representing different sizes and models to determine best
    practices and create a standard that works for different types
    of systems?
        Mr. Carter. We are currently in a rulemaking process that
    basically is intended to get significant input from the
    industry as to how we should approach our transit asset
    management program. We also are in the process of developing
    technical assistance for agencies to allow them to be in a
    better position to implement these types of requirements as
    well as developing additional tools that they will be able to
    utilize that the Federal Government will provide that will
    allow them to do the analysis necessary to develop a Transit
    Asset Management Plan.
        We believe that it is critical that we have good, solid
    industry input into this process and that we develop a process
    and a program that will address the various capacities and
    technical capacities of the various size agencies that will
    have to implement it.
        Chairman Menendez. Senator Warren.
        Senator Warren. Mr. Chairman, thank you, and thank you for
    calling this hearing. I have questions for the next two
    witnesses, so I will just hold until then.
        Chairman Menendez. OK.
        Senator Warren. Thank you.
        Chairman Menendez. One final question. Workers' rights. You
    know, we think about the challenges of transit system's
    operating systems and facing fiscal challenges in the state-of-
    good-repair status. I also think your testimony says that
    nationwide almost a third of the facilities used by local
    transit agencies to house their operations staff and service
    their vehicles are in a marginal or poor state of repair.
        Are these facilities a threat to the health and welfare of
    our transit workers?
        Mr. Carter. Well, first, I think I should be clear that we
    believe the systems are safe. Transit is one of the safest
    modes of travel that we have available to us in this day and
    age.
        We also believe very strongly that there are steps that
    need to be taken in order to address the safety not just of the
    general public but of the employees who work for these agencies
    as well.
        There is no question that when you are dealing with an
    aging infrastructure and the needs that are required to
    maintain that infrastructure, employees are going to be working
    in hazardous conditions with moving vehicles and things of that
    nature, that can make for an unsafe situation. But there are
    steps that transit agencies take and do take, and I know from
    my own experience we focus very closely at CTA on making sure
    that our operators have appropriate training, the appropriate
    tools, the appropriate protocols are in place to maximize the
    safety of those employees when they would engage in these types
    of activities.
        But the reality is that for as long as it is going to take
    to fix this problem, that will require more workers to work in
    environments where that could be a more dangerous situation
    than if it were in a state of good repair.
        Chairman Menendez. All right. Well, thank you for your
    testimony. We look forward to continuing being engaged with you
    as we develop the legislation that the Committee is considering
    on the transit side of MAP-21 authorization.
        We appreciate your testimony, and you are excused.
        Mr. Carter. Thank you, Mr. Chairman.
        Chairman Menendez. Let us now hear from our three transit
    agencies about their work trying to maintain their systems to a
    state of good repair. And as I call them up, I want to remind
    all of our witnesses that their full statements will be
    included in the record, and we would ask you to summarize your
    statement within 5 minutes or so, so that we could enter into a
    dialogue with you.
        Our first witness is Mr. Joseph Casey. He is the general
    manager for the Southeastern Pennsylvania Transportation
    Authority. SEPTA service is important to a number of my
    constituents as well, so I appreciate your willingness to
    appear before the Subcommittee today.
        I know that Senator Warren would like to introduce Dr.
    Beverly Scott, and I think that this moment would be a good
    time to do so.
        Senator Warren. Thank you very much, Mr. Chairman. It is my
    great pleasure to introduce Dr. Beverly Scott, who is the
    general manager at the Massachusetts Bay Transportation
    Authority, our MBTA, and the administrator for MassDOT rail and
    transit. Dr. Scott is responsible for managing the MBTA,
    overseeing the Commonwealth's 15 regional transit authorities,
    and MassDOT's freight and passenger rail program.
        Dr. Scott has tremendous expertise in these issues, not
    only in Massachusetts but also nationally. Her career in the
    public transportation industry spans more than three decades
    and includes executive and senior leadership positions with
    some of the Nation's largest public transit systems.
        Prior to coming to the MBTA, Dr. Scott served as chief
    executive officer and general manager of the Metropolitan
    Atlanta Rapid Transit Authority, MARTA, where she was the first
    woman to hold that position. Additionally, she served as
    general manager and chief executive officer of the Sacramento
    Regional Transit District, SRTD, and she also served as the
    general manager of the Rhode Island Public Transit Authority,
    RIPTA.
        Dr. Scott is nationally recognized for her extraordinary
    leadership and thoughtful advocacy in advancing increased
    investment for effective and efficient transit infrastructure.
    She is a leader in her field and was named Transportation
    Innovator of Change by President Obama and the U.S. Department
    of Transportation for her long record of strong leadership and
    innovation in the transportation industry.
        We are very pleased to have you in Massachusetts and very
    pleased to have you here today in Washington. Thank you.
        Ms. Scott. Senator, thank you so much.
        Chairman Menendez. Thank you, Senator Warren. It sounds
    like every system could use a doctor.
        And, finally, our third witness today is Mr. Gary Thomas,
    who serves as the president and executive director of the
    Dallas Area Rapid Transit, so we thank you for joining us.
        Mr. Casey, we will start off with you and move down the
    aisle. As I said, your full statements will be included in the
    record. Please try to summarize them in about 5 minutes or so,
    and then we can get into some back and forth.

      STATEMENT OF JOSEPH M. CASEY, GENERAL MANAGER, SOUTHEASTERN
         PENNSYLVANIA TRANSPORTATION AUTHORITY, PHILADELPHIA,
                              PENNSYLVANIA

        Mr. Casey. Good morning. Chairman Menendez, Senator Warren,
    I want to thank you for the opportunity to testify on the
    Federal role in bringing this Nation's public transportation
    infrastructure to a state of good repair. I am Joseph Casey,
    general manager of the Southeastern Pennsylvania Transportation
    Authority--SEPTA--located in Philadelphia, Pennsylvania. SEPTA
    is the sixth largest public transit operator in the country and
    the largest in Pennsylvania. SEPTA provides 1.2 million daily
    passenger trips, which are essential in supporting the economy
    of the southeastern Pennsylvania region.
        Last year, Americans took 10.7 billion trips on public
    transportation, yet at a time when transit ridership reached
    its highest levels in 57 years, the industry continues to fall
    behind in the investment required to bring our transit systems
    to a state of good repair.
        According to the 2013 Conditions and Performance Report
    released by the U.S. Department of Transportation in February,
    the state-of-good-repair backlog for transit systems nationwide
    has risen to $86 billion. This number is projected to grow by
    $2.5 billion per year, and the report states that total
    spending on state of good repair from all sources must increase
    by $8.2 billion per year to address this backlog.
        The funding and operational pressures related to state of
    good repair are particularly acute in the large urban transit
    systems with aging rail infrastructure. Infrastructure related
    to rail transportation accounts for a significant majority of
    the national transit state-of-good repair backlog.
        SEPTA's experience demonstrates the need for investment and
    the cost of not investing. Our current backlog of unmet
    infrastructure needs is now $5 billion--nearly three-quarters
    of which is concentrated in SEPTA's aging rail infrastructure.
        Our challenges are not unique among large, old rail
    systems. In northeast Illinois, the investment that would be
    required to bring Chicago's regional rail transit systems to a
    state of good repair would be roughly $20 billion. In Georgia,
    the Metropolitan Atlanta Rapid Transit Authority, MARTA, will
    see their state-of-good-repair backlog grow to $7 billion by
    2024 without an additional state-of-good-repair investment.
        In MAP-21, the Congress responded to the rail state-of-
    good-repair crisis by creating a new state-of-good-repair
    formula grants program and increasing funding for the Nation's
    rail transit systems to invest in the critical state-of-good-
    repair needs. On behalf of the transit riders in our region, I
    want to thank the Committee for this role in making that
    program a reality.
        Since 2010, I have served as Chair of an informal group of
    the Nation's largest, oldest rail transit systems, the
    Metropolitan Rail Discussion Group, that together carry
    approximately 80 percent of the Nation's public transportation
    passengers. We continue to maintain, as we have since our
    formation in 2007, that the long-term, predictable, and growing
    transit program that emphasize state-of-good-repair investment
    in the rail transit systems that enable this Nation's world-
    class economies is not just good transit policy but sound
    economic policy as well.
        To understand the entire cost of not investing, we need to
    look beyond ridership impact to the broader economic benefits
    of public transit in our major metropolitan areas. These areas
    rely on public transportation to fuel economic growth and
    competitiveness by connecting employees to their jobs, allowing
    freight and vehicle commuters to move on less congested
    highways, and providing important mobility options for all
    members of the community.
        The Nation's economy is damaged when our major metropolitan
    areas cease to function efficiently as gateways for the
    movement of goods and people between U.S. and international
    destinations. Maintaining the infrastructure that supports
    metropolitan rail transit systems is an established national
    priority, and Congress must preserve the Federal Government's
    50-year-plus commitment to public transportation and preserve
    the strength of the mass transit account in the Highway Trust
    Fund.
        We spend too much time focusing on the cost of Government
    infrastructure programs and too little time focusing on the
    crippling cost of not investing in infrastructure. A short-term
    patch on the Highway Trust Fund highway and transit accounts
    will not address the crucial shortfall in investment. If
    Congress takes that approach--either for 6 months, a year, or 2
    years--transit systems will again be left without the
    appropriate funding or budget certainty needed to plan and
    execute major infrastructure rehabilitation projects.
        It has been more than 4\1/2\ years since the expiration of
    the last transportation bill that provided any long-term
    investment and planning ability. The intervening period has
    been marked with uncertainty and insufficient funding growth. I
    urge this Subcommittee and the full Committee to develop a plan
    for a multiyear public transportation investment program with
    funding levels that increase from year to year to meet the
    growing needs across the country. A robust and growing rail
    transit state of good repair and a fully funded core capacity
    program that allows aging systems to sensibly accommodate
    ridership growth while continuing to address state-of-good-
    repair needs should be the centerpieces of the national transit
    program.
        I want to thank you for the opportunity to testify today,
    and I look forward to answering any questions you may have.
        Chairman Menendez. Thank you.
        Dr. Scott.

       STATEMENT OF BEVERLY A. SCOTT, GENERAL MANAGER AND CHIEF
     EXECUTIVE OFFICER, MASSACHUSETTS BAY TRANSPORTATION AUTHORITY

        Ms. Scott. Chairman Menendez, Senator Warren, it is a
    pleasure to have the opportunity to testify this morning.
        For overall context, the Massachusetts Bay Transportation
    Authority, affectionately called ``The T,'' is the fifth
    largest public transit provider in the United States with more
    than 1.3 million passenger trips per day and close to 400
    million trips per year, and that is across an extensive heavy
    light rail, bus, commuter rail, water ferry, and paratransit
    network.
        We are also the oldest major public transit system in the
    United States with a subway system that opened in 1897, the
    oldest in the country, which still operates today at crush
    loads every average weekday peak period, and a commuter rail
    network that was originally laid out in the 1830s, among some
    of the first railroads in the country--a network which remains
    today a vital link for our Commonwealth, our partner States
    throughout New England and in the Northeast region, and the
    national passenger rail network along the Northeast corridor.
        On our bus side, a critical element of our overall transit
    network, some of our bus facilities date back to the early 20th
    century, having been initially designed to serve horse-drawn
    omnibuses.
        As you would expect, achieving a state of good repair is a
    significant challenge for the T. Today we estimate our backlog
    of state of good repair at close to $5 billion. It is a
    challenge that we live every day, our customers experience with
    us every day, and our employees work to overcome every day.
        Speaking of our transit workforce, the people
    infrastructure--those who plan, design, operate, and maintain
    our systems, particularly our frontline employees--it is also
    extremely important that workforce development at all levels is
    not an afterthought as we grapple with our need to achieve a
    state of good repair.
        All of this said, while we still have a long way to go and
    definitely need a continued, strong Federal partner, including
    significantly increased Federal investment in our critical
    transportation infrastructure, both in our existing and well-
    supported new targeted transit investments, under the
    leadership of Governor Patrick we are making strides through
    implementation of a serious transportation reform agenda,
    including actions to bring transit employee health care and
    retirement benefits in line with other State agencies, the
    implementation of sustainable internal productivity and cost
    containment measures, and the deployment of new technologies to
    improve our overall customer experience.
        On top of this transportation reform agenda, our Governor
    proposed the Way Forward transportation program this past year
    to provide much needed increased local funding for our
    statewide transportation, a self-help plan, if you will,
    including the MBTA, and statewide rail and transit, including
    our 15 regional transit authorities. And this year, this past
    year, that was successful with the help of our legislature, the
    business, and our communities across the Commonwealth,
    resulting this past year in the passage of the largest bond
    package for transportation as well as significant new
    investments sustainably for transportation in the
    Commonwealth's history, including new State revenues dedicated
    to funding transportation, the first increase in over 20 years
    of the State gasoline tax, and this increase is aligned with
    inflation to ensure that the level of funding will keep pace
    over time.
        The reason I say these things is, as we stressed this
    morning, the absolute criticality of a strong Federal
    partnership, predictability of funding, and significantly
    increased Federal funding to help to turn the tide on this. I
    want to make it very clear that we appreciate and we respect at
    the local level that we need to step up and do our part as
    well, and so that is what you see on the part of our
    Commonwealth.
        So what I will say is that things have certainly gotten
    much better and we are continuing, but we are definitely in
    great need of continued support by the Federal Government.
        On the side of--I want to take a little bit now--state of
    good repair, fix it first, commonsense must happen. But at the
    same time we cannot wind up only looking at the hole and not
    the doughnut, and that means that we have to also make new
    targeted investments for growth. And so for us, the most
    notable of those projects at the Federal level is our Green
    Line expansion project, which we are moving through the New
    Starts program at this point in time. And this project will, in
    fact, wind up for us filling what has been a missing transit
    link serving some of the most densely populated communities,
    honestly, in the United States. Right now those communities of
    Somerville, Medford, and Cambridge are only within--only 20
    percent of those communities are within distance today of a
    rail station. When this project--and prayerfully, we will, in
    fact, hopefully receive an FFGA for this project, when that is
    over, we will then be able to provide access for what is over
    50 percent environmental justice communities for within--75
    percent of those communities will be within walking distance to
    rail, which will significantly wind up decreasing their travel
    times by 65 to 75 percent and opening up a tremendous vista, if
    you will, of new job and economic development opportunities for
    a much needed community.
        So at this point, we have done everything--asset
    management, thank you, Federal Transit Administration, for all
    of their support. We believe that we are struggling like
    everybody else but cutting-edge, if you will, in terms of asset
    management and moving in that direction. Performance metrics,
    this is how we do our work. We are extremely transparent in
    terms of what we consider the metrics to be in working with the
    public. And we have also aligned what we are doing on the
    transportation side with critical public policies having to do
    with housing affordability, greening, resilience, just--it is
    not just transit for transit's sake. It is really about
    livability, overall economic competitiveness, and the way.
        So, in conclusion, as we experience record high and growing
    transit ridership and increasingly aging systems, reaffirming
    the Federal commitment in partnership with a program that has
    both predictability and growth is essential to making real
    progress to turn the tide on the state-of-good-repair backlog,
    and this is one that States and localities cannot successfully
    tackle on our own. Federal partnership and investment is key.
        So, with deep respect, thank you very much.
        Chairman Menendez. Thank you.
        Mr. Thomas.

      STATEMENT OF GARY THOMAS, PRESIDENT AND EXECUTIVE DIRECTOR,
                       DALLAS AREA RAPID TRANSIT

        Mr. Thomas. Thank you, Chairman Menendez and Committee
    Members. I appreciate the opportunity to be here today. My name
    is Gary Thomas, and I am the president/executive director of
    Dallas Area Rapid Transit. We have a little bit different story
    to tell. We are not over 100 years old. As a matter of fact, we
    are just over 30 years old now. The voters of North Texas voted
    to dedicate a 1-percent sales tax in 1983 to create a
    transportation agency, and today we operate bus, light rail,
    commuter rail, paratransit services, and HOV services in the
    North Texas region covering a 700-square-mile area, 13 cities,
    and about 2.4 million people, providing roughly 107 million
    trips annually. I would also like to add that we operate the
    longest light-rail system in North America.
        So as you can see, we have had very rapid growth, opening
    our first light-rail segment in 1996, and now operating 85
    miles. Later this year we will add an additional 5 miles as we
    go to DFW Airport. We will open that segment 4\1/2\ months
    early and under budget. While our oldest segments are now only
    18 years old, our growth and subsequent state of good repair is
    closely controlled by a 20-year financial plan that we strictly
    adhere to.
        This financial plan, by policy, ensures that we balance our
    anticipated revenues against our operational expenses, our
    asset management, and our capital expansion. Even though we are
    relatively young, we have over 15 years of asset management
    experience. One of the biggest key components of our program is
    a regularly scheduled asset condition assessment that we do on
    an annual basis, and then once every 5 years, we have an
    outside consultant come in and verify where we are and then
    determine if there is a course correction that needs to be
    made.
        The good news is that MAP-21 ensures a more unified
    approach industry-wide regarding the development of transit
    asset management plans holding each of us accountable for
    managing our assets responsibly. We are supportive of allowing
    the FTA to complete their process and the industry time to
    implement the new policies before making major policy revisions
    in a new transportation bill.
        The good news, and perhaps the bad news, is that we have
    created a large appetite for transportation choices in North
    Texas. This obviously relates to where people live, where they
    work, and we see that happening, surprisingly, as some people
    might find, in North Texas every day. This appetite requires
    not only maintaining our existing system, but growth of the
    system to address the fourth largest and one of the fastest
    growing metropolitan regions in the country. Over 73 percent of
    our capital expenditures for the next 20 years is for SGR,
    leaving very little for growth, even though the demand is
    great.
        One of our key areas of need addressing both SGR and growth
    is what is happening in our core area of our system. Right now
    we have a hub-and-spoke system, and the hub is a single
    corridor through downtown Dallas. Because of the growth of the
    system and the service that we provide and the growth of that
    service, the track conditions in the corridor are deteriorating
    faster than we initially anticipated. This means that we will
    start a $45 million capital program later this summer,
    replacing over the next couple of years the rail through this
    core area. Additionally, we are planning a core capacity set,
    or group of projects, to relieve the pressure on this existing
    core. Therefore, we are a strong advocate for the core capacity
    program initiated in MAP-21 to be preserved in the next surface
    transportation bill. Our core capacity project as envisioned
    provides capacity and flexibility while reducing maintenance
    needs in the future. So a lot of the new starts and new
    projects actually go hand in hand with the core capacity as
    well as state-of-good-repair projects.
        Mr. Chairman, in conclusion, in order to continue to
    provide transportation choices for North Texas, we desperately
    need a long-term, fully funded transportation bill providing
    stability and predictability for our agency and, more
    importantly, for our customers. We applaud the 6-year term in
    the proposed highway bill and the funding levels in the GROW
    AMERICA legislation. I would hope that this Committee would
    consider both of those and consider the APTA recommendation and
    merge these two together, resulting in a 6-year fully funded
    bill for transit of $104 billion.
        Of course, where public transit goes, community grows, and
    on behalf of our board of directors, our 3,700 employees, and
    our millions of customers, thank you for this opportunity
    today, and I look forward to answering any questions.
        Chairman Menendez. Thank you all for your testimony.
        Let me first start with maybe a couple of yeses or noes, if
    we can. DOT's Conditions and Performance Report tells us that
    if recent investment levels are maintained, by the year 2030,
    which is only 16 short years from now, the Nation's transit
    system will be facing $142 billion in deferred system
    preservation--I underline ``preservation''--projects. Given
    that Federal funding makes up more than a quarter of the
    investments, it seems that we have work to do.
        Just by a simple yes or no, does anyone on the panel
    believe the current funding levels are enough to help you
    achieve a state of good repair? We will start off with you, Mr.
    Casey. If you would put your microphones on while we are doing
    this, I would appreciate it, for the record.
        Mr. Casey. They are insufficient.
        Chairman Menendez. Dr. Scott.
        Ms. Scott. Woefully insufficient.
        Chairman Menendez. Mr. Thomas.
        Mr. Thomas. No, sir.
        Chairman Menendez. OK. And if Federal funding remains flat,
    does anyone believe--or is it a possibility--and I have heard,
    Dr. Scott, your testimony about the Commonwealth. But does
    anyone believe if we just remain flat that additional State and
    local funding alone can cover the cost of starting to pay down
    the backlog? Mr. Casey.
        Mr. Casey. No. I will say that last year the Pennsylvania
    Commonwealth passed a transportation bill. It was approximately
    half of what our needs are going forward to address our state
    of good repair. So, no, the State actually did their share, I
    think, but I think the Federal Government really needs to step
    up and do a similar bill.
        Chairman Menendez. Dr. Scott.
        Ms. Scott. Same, sir. Not possible.
        Chairman Menendez. Mr. Thomas.
        Mr. Thomas. While we have a large local match with our 1-
    percent sales tax, it is not nearly enough to do what we need
    to do as we move forward.
        Chairman Menendez. Now, Mr. Casey, your testimony states
    that the state-of-good-repair challenges are particularly acute
    for large urban rail systems, and you noted that the average
    age of SEPTA's rail bridges is more than 80 years old, 103
    bridges that are more than 100 years old. That is a pretty
    challenging reality for the system.
        What practical impact do these needs have on your riders on
    a day-to-day basis?
        Mr. Casey. Well, we were faced with shutting down a lot of
    our rail system prior to the transportation bill out of
    Harrisburg. From a practical standpoint, your first issue is
    slow orders, you slow down the track, and then you have weight
    restrictions, and then eventually shutting down the structure.
        We have with the funding that we received from the State--
    prior to the funding from the State, we had no bridge repairs
    in our capital program. Now that we did get State funding, I
    have 18 bridges that I am addressing in the next 5 years. And
    just to give you the age of some of these bridges, I will go
    through--there are 18 of them. The construction was 1891, 1900,
    1891, 1900, 1896, 1916; a major bridge was built in 1895, and
    it is significant because it spans 922 feet, 150 feet in the
    air off the ground. I could go on and on. I have bridges here,
    1876, 1854, 1834, 1834, 1906, et cetera.
        We have a very old system, and a lot of this was built, you
    know, Penn Central, the Reading Railroad, et cetera, that all
    went bankrupt. Very little has been done to repair these, to
    replace these structures.
        We were in dire straits. The State funding gave us the
    ability to help dig out of this hole, but as I said, with over
    103 bridges over 100 years old, you know, we can only address
    18 of them in the next 5 years.
        Chairman Menendez. Dr. Scott, you said something--maybe it
    is not about bridges in the T's case, but you talked about how
    your passengers also face the challenges with you. What are
    some of those challenges?
        Ms. Scott. Same types of things: slow orders, just an
    inability to be able----
        Chairman Menendez. For the record, for those who may read
    it and not know what a slow order is.
        Ms. Scott. A slow order means that there will be a period
    along a stretch of the track where simply because of the
    condition--it could be a bridge or a tunnel segment or
    whatever--I have got to really--instead of being able to take
    it at the speeds that it really could go through from a science
    standpoint, we have got to slow it down. Sometimes you are
    talking taking it to a crawl of 5 to 10 miles per hour, which
    means--you can imagine what that means in terms of the commute
    time for our riders. And so it is--and you ultimately get to
    the point where you just have to--you just literally have to
    close down a segment.
        Chairman Menendez. Let me ask you, Mr. Thomas, your
    testimony notes that DART is considering applying to the new
    core capacity program within the New Starts account. And I
    think there is often a perception that the program is used
    primarily by much older, heavier rail systems. Can you talk
    about the importance of a Federal core capacity program in
    helping a newer light-rail system like DART maintaining a state
    of good repair?
        Mr. Thomas. Yes, sir. The core capacity program in our
    particular case would be incredibly vital and important as we
    continue to expand our system. We are really at a point now
    where, if we add to our system, we cannot get more trains
    through the single corridor that goes through our downtown
    area. So before we can add any more to our system, or really,
    as I tell a lot of folks locally, if something happens on the
    corridor--a fire happened on that corridor not too long ago.
    The fire department put their hoses across the corridor. They
    did not appreciate the idea of us rolling trains across that
    fire hose. So we had to actually stop service during rush hour
    to make sure that we dealt with it. So the core capacity
    program gives us the flexibility and it gives us the capacity
    to do that.
        Now, what we are looking at, Mr. Chairman, is a combination
    of projects, understanding that, on the one hand, we have got
    to provide our local match; on the other hand, the core
    capacity program is limited in size right now. So we are
    looking at how we can reduce the size of the project and maybe
    combine projects to deal with that capacity issue in our
    downtown area. Currently we are looking at replacing the rail
    in the downtown area. Because of the traffic, and the amount of
    traffic that we have put through downtown, the trains have
    already worn through the hardened surface on the rail, and so
    it is eating through the rest of the steel very, very quickly.
        So we are at a point now where we have got to replace that
    to maintain our SGR and at the same time figure out how to
    expand the system to give us the flexibility and capacity
    through downtown that we need. So that program ends up being
    critically important to us as we move forward.
        Chairman Menendez. I have a couple other key questions, but
    I want to turn to my colleague. Senator Merkley.
        Senator Merkley. Thank you very much, Mr. Chairman, and
    thank you to all of you.
        I want to ask just a limited question that has come from
    several of my transit districts, so given your experience on
    the ground, I thought you might have some insight on this. This
    is essentially the situation where the discretionary grants
    have been changed to a funding formula in the bus and bus
    facility program under MAP-21. And the result for a couple of
    my transit districts is they are having a great difficulty
    acquiring replacement buses in the fashion that they did
    before, which means they are buying fewer, therefore not
    getting group bus discounts, and they are keeping inefficient
    buses that need high levels of maintenance on routes for longer
    to the detriment of the agency.
        Have you all experienced in your own respective realms any
    challenge like this? I would invite any of you to answer.
        Mr. Casey. I have not, no.
        Senator Merkley. OK.
        Ms. Scott. I have not at the T, but we have 15 regional
    transit authorities which are much smaller systems, and while
    we keep a good overview from the broad Commonwealth level, I
    can tell you that it is more challenging for them.
        Senator Merkley. Thank you.
        Mr. Thomas. Yes, sir. From our perspective, again, I have
    not, and I think it really relates to the size of the agency
    and the wherewithal and the forward planning. And the larger
    agencies, in many cases they can accommodate that. And the
    smaller agencies, quite frankly, they cannot. And the trickle
    of money does not buy a bus, and you cannot save it up that
    quickly.
        Senator Merkley. Well, thank you for sharing that directly
    from the front line, and I am listening in with interest
    through the questions my colleagues are asking, and I am going
    to pass this on. Thank you.
        Chairman Menendez. Senator Warren.
        Senator Warren. Thank you, Mr. Chairman, Senator Merkley.
        I would like to ask a question from a little different
    direction, and that is about the economic impact of our
    transportation infrastructure and the state of our
    transportation infrastructure. As I see it, the economy turns
    on transportation infrastructure. This is how people get to
    work. This is how businesses get their goods to market. And
    without a transportation infrastructure or with a decaying
    transportation infrastructure, the whole economy is in trouble.
        So, Dr. Scott, you mentioned the Green Line extension, and
    I would like for just a minute to talk about that. This is an
    extension of the T that would go to one of the most densely
    populated areas in the country, principally to Somerville,
    Massachusetts. I was very pleased to see that the President had
    included $100 million in his fiscal year 2015 budget in order
    to get this expansion of the T. But what I would like to do is
    start with this question, Dr. Scott: Can you talk about what
    the lack of basic infrastructure has done to the economy of
    Somerville? And then we will talk about the other side.
        Ms. Scott. I would tell you that what it has done is that
    it has stymied it. From one standpoint, just let me talk about
    the jobs portion of it. It has made it much more difficult for
    people within the Somerville area to, in fact, be able to
    access good employment opportunities. And so that is, both
    outside as well as development within Somerville, it has made
    it much more difficult for Somerville to be able to attract
    employment and business opportunities.
        Now, what I can say to you is that I just always look at
    things are what they are, and so just with the knowledge that
    this project is coming--and we are absolutely committed to this
    project. Just look at the development that has started to take
    place already. You go and, in fact, we--and we were delighted
    that Secretary Foxx actually took a little time to come through
    to actually see the project. At NorthPoint, right there where
    we have Lechmere, 2.2 million in terms of development, office,
    residential, multi-use. At Union Square, another 2 million
    square feet of development. This is development that absolutely
    would not be taking place; they are both absolutely right there
    where the transit is--literally, at the Union Square, the
    station is actually right there where the development is. And
    then you look at what is taking place at places like MaxPak.
        So the growth and the development that is just being
    catalyzed, if you will, by that Green Line expansion project
    are just--it is just absolutely unbelievable.
        Senator Warren. Well, I have walked through and seen this,
    and it really is terrific. I was going to ask you the other
    half, and that is, you know, it is expensive up front to make
    these investments, and yet study after study shows that when we
    do, we get enormous economic impact. We get job growth. We get
    economic development. So I want to thank you. And I want to
    thank you for your advocacy on behalf of the Green Line, but
    also your advocacy on behalf of the whole transit system.
    Enormously valuable.
        Ms. Scott. Thank you. Thank you. But, you know, just--the
    American Public Transportation Association at the gross level
    has done work on this. For every $1 that winds up going into
    transit, the multiplier effect in terms of four--at least $4
    that wind up coming in terms of what we call that broader
    impact, and then not just in terms of property values and
    residential development and all of that, but then looking at it
    as well in terms of jobs creation. I have seen numbers that
    have been--for every $1 billion, we are looking at something
    like about 32,000 to 40,000 jobs that wind up being created.
        So it is the engine. I always laugh and tell people that it
    is not the infrastructure that is the ``it.'' It is actually
    the outcomes and the benefits that we have for people in
    communities.
        Senator Warren. Yes. And, actually, let me just extend that
    over to Dallas, because I have been looking at the studies
    there as well. You know, you have had amazing growth, gone from
    zero hard rail to miles and miles of a system in 30 years. And
    I saw two recent studies by the University of North Texas that
    estimated that the $4.7 billion spent between 2002 and 2013 to
    expand light rail in the Dallas system has already generated
    over $7.4 billion in regional economic activity, including tens
    of thousands of jobs that paid in excess of $3.3 billion in
    salaries, wages, and benefits; and made the point also in one
    of these studies that more than 5.3 billion in private capital
    transit-oriented development projects have been built or are
    under construction or are planned near the DART light-rail
    stations.
        So we are over time, but if Mr. Chairman will indulge me
    for just a minute, I wanted to give you a chance, Mr. Thomas,
    to talk about, based on your experience, how capital investment
    in rail transit can stimulate economic growth and whether or
    not your experience in Dallas can be replicated in other places
    around the country.
        Mr. Thomas. You know, it has been fascinating to watch,
    Senator, what has happened in Dallas, because when we first
    started, we were focused on getting the rail on the line
    obviously to move people safely, efficiently, and effectively.
    There were other people that understood the value of that
    infrastructure, the value that they could take advantage of,
    quite frankly, and take advantage of in a good way for our
    community. And once that started, once people started
    realizing, now as we look to other areas in the expansion, it
    is certainly to move people, but it is also the air quality
    opportunities, the congestion mitigation opportunities, and
    then the economic development opportunities.
        There was a point in time when the economy got a little
    soft and we had to start talking about a delay. We literally
    had buses of people showing up at our board meetings to explain
    to us why that was not a good idea to delay those projects. And
    in large part, it was due to not just the transportation but
    the economic development opportunities that had already been
    thought about and already planned. As you mentioned, the study
    that was recently completed by the University of North Texas
    was an update of a study that had been done previously, and
    that was a very, very narrowly tailored study because it only
    looked at projects that were on the tax rolls. So publicly
    funded projects, the big hospital expansion, the new Civic
    Center, those were not even on that list. And so it is pretty
    incredible to see not only the projects of economic
    development, but also the rental rates is part of that study,
    and it shows the increase in rental rates within a quarter mile
    of the station. We are seeing it over and over, proving out the
    4:1 benefits that the APTA study has also shown.
        Senator Warren. Thank you. Thank you, Mr. Thomas.
        Mr. Chairman, would it be all right to ask Mr. Casey to
    weigh in from SEPTA's perspective?
        Chairman Menendez. Absolutely.
        Senator Warren. Mr. Casey.
        Mr. Casey. We have a very old system, and, unfortunately,
    the last number of years we have not done a lot of expansion.
    But what we are seeing is a lot of investors wanting to build
    facilities, whether it is homes, you know, apartment buildings,
    et cetera, around our stations and utilizing the benefits of
    transit for further development because it makes it much more
    attractive.
        But, again, there is a lot of interest in us expanding the
    system. There is one particular project, we have a Broad Street
    line, one of our heaviest lines, wants to extend into the
    former Navy Yard, which is attracting companies from all over
    the place. So there is an expansion.
        But I just want to say that more and more people in
    Philadelphia are opting or wanting to take public transit. In
    the last 15 years, we have had a 50-percent growth on the
    regional rail system--50 percent. And the only thing really
    limiting us from even further expansion is capacity. The number
    of vehicles that we have on the regional rail is--has not
    increased--it actually has increased a little bit, but it is
    minor. Those cars are already filled up. But it is parking, it
    is--you know, if I was able to invest, there is no question in
    my mind you would see easily a double-digit growth in the
    utilization of those services.
        Senator Warren. Well, I want to thank you all very much.
        Thank you for your indulgence, Mr. Chairman. And I just
    want to say I think Dr. Scott makes exactly the right point.
    Transportation infrastructure is powerfully important, but not
    as an end in itself. It is powerfully important because this is
    how we help our economy move forward.
        Thank you, Mr. Chairman.
        Chairman Menendez. Thank you.
        Just one last set of questions for the panel. If you were
    sitting here instead of there and being able to write the new
    transit provisions of MAP-21 outside of the funding issue,
    which I think we collectively agree on, is there anything that
    you would change or add that does not exist in the law today?
        Mr. Casey. As far as I am concerned, I just think the--we
    just need to invest more money into the transit, and whether it
    is--we have issues from the older properties, but the smaller
    operators with buses also have issues. The pot just really has
    to grow. It has been insufficient for us to maintain our
    current system.
        Ms. Scott. What I would stress is that--and we have begun
    to see the threads of it, but I think that a focus in terms of
    performance and not rewarding bad behavior. I think that that
    is important. I think that the connecting of the dots of state
    of good repair with things like going for full funding grant
    agreements, I think that the more that we do those kinds of
    things that are self-reinforcing.
        I am a person who, when people ask me, ``Bev, what are the
    things that keep you up at night?'' I am going to come back to
    workforce, OK, making sure that there is funding, intentional
    funding, to help in terms of the workforce development. We put
    less than probably 0.5 of a percent in terms of training and
    development of our people, the kinds of things that keep me up
    at night, and I can assure you, every one of the operators that
    is here are the issues in terms of we are not going to have
    excellence in terms of the systems without the people.
        Now, I do not want to overdo this, but this is--we have
    6,200 employees at the T. I can tell you today that there are
    800 folks who have the time and the years to be able to retire.
    Over 30 percent of those are in my specialized maintenance
    areas. When I take that number 5 years from now, it becomes
    1,800 people who will have the time and the years to be able to
    retire; 38 percent of them are in my specialized maintenance
    areas--signal, track, rail controllers. You can replace a
    general manager faster than we are going to be able to do that.
    So to see some synergies between this bill and education,
    workforce and labor, would be absolutely unbelievable.
        Chairman Menendez. Mr. Thomas, do you have anything to add?
        Mr. Thomas. Yes, Mr. Chairman. I think it is flexibility.
    As we have seen this morning, each one of our cities is
    different. Each city across the country is different. We all
    have different needs. We are all in different places. And so
    making sure that the bill going forward offers the flexibility
    to each of us to do what we need to do in our respective cities
    to grow the economy, to provide opportunities to people, I
    think that is critical moving forward.
        Chairman Menendez. I appreciate those answers.
        Mr. Casey, let me ask you, you chair the Metropolitan Rail
    Discussion Group, and one of the group's principles is that
    funding should be prioritized according to need and national
    importance. To what extent do current Federal programs adhere
    to that principle? And what changes would you make in that
    line, if any?
        Mr. Casey. Well, I think it is a recognition of the older
    systems, and I think when you look at our system and, you know,
    our needs, you know, in Philadelphia with the number of
    bridges, and I think people are shocked to learn that we are
    responsible for 350 bridges, and I think those infrastructure
    needs are different than--you know, I hate to say maybe Dallas
    might not have those infrastructure needs. So I think those
    issues have to be part of the discussions.
        You know, one thing I did not discuss is our substation,
    power substations that are, you know, dealing with 1920
    technology that is out there. They have been in operation
    since, in some cases, the 1920s, 1930s. And generally they are
    40, 50 years past their useful life. Those critical issues
    really need to be addressed as we go forward. And it is not
    just one of two of them. I mean, I have 15 of the substations
    that really have to be addressed at one time. And if I have a
    failure on that, I just cannot--I cannot get the parts. If I
    fail, it fails, and it is down for a long time.
        Chairman Menendez. Dr. Scott, my understanding is that the
    MBTA has been working to develop an asset management plan for a
    number of years, well before any Federal requirements were
    created in MAP-21. Can you give the Committee some details on
    how your asset management system works? And has it helped you
    agency better target its investments? And by any chance has the
    FTA asked you or talked about some best practices that can be
    considered in new Federal asset management requirements?
        Ms. Scott. Absolutely. First, I do want to--FTA has been
    right there at the table with us from the very beginning, and
    we were some of the first pilot programs that they really
    helped to fund in terms of being able to develop the data bases
    and things of that nature.
        What I will tell you is that it has radically reshaped--I
    will be quite candid in terms of how we have done our capital
    plan, our capital planning. It is no longer--I mean, this is
    really a robust involvement on the part of all the departments.
    You have to be very, very clear in terms of exactly what is the
    need, what is going to wind up being the benefit that winds up
    coming from it. We are beginning now to--particularly as we
    bring our maintenance management systems, we are beginning to
    actually move into being able to look at life cycle so that we
    can, in fact, actually change the method in terms of how we do
    procurements. You have to have the data to be able to support
    being able to do much more in terms of life cycle procurements.
        So no capital project comes to the table without there
    being a full look in terms of not only the aspects of safety
    and obsolescence, but innovation, resilience, accessibility,
    and also the people implications and the long-term operating
    implications of those investments. None of that would have
    happened if we had not been much more thoughtfully and
    intentionally looking at both the data as well as just changing
    our decision lens, if you will, in terms of how we do resource
    allocation.
        It is a work in progress, but very, very different than
    what we had done in prior years.
        Chairman Menendez. Mr. Thomas, you state that DART's
    capital program has mechanisms built in to deal with funding
    volatility. Given years of trust fund instability, the
    uncertainty of the annual appropriations process on the transit
    New Starts account, and even in the past the Government
    shutdown, how has the volatility impacted DART's ability to
    provide reliable transit service? And how are you preparing for
    the possible concerns as it relates to the Highway Trust Fund?
        Mr. Thomas. Well, certainly as I said, we have a 20-year
    financial plan, and that 20-year financial plan anticipates all
    the revenues and all the expenses over the next 20 years. We
    adjust that annually. Obviously, we do not know exactly what is
    going to happen for the next 20 years, but we have several
    economists that work with us to help us identify what is going
    to happen from a local funding perspective. And then we take a
    very conservative approach from the Federal participation.
        However, if the trust fund is not funded into this calendar
    year, then it would require us to make significant cuts as we
    move forward. We are already in the process of looking at what
    that would be, what those service impacts would be, and
    starting to determine where that list is and to communicate
    what that list might look like to our constituents in the North
    Texas area.
        Chairman Menendez. Let me ask you all one final question. I
    do not know if Senator Warren has any others. But, you know, I
    assume that in some shape or form you survey or deal with your
    ridership in trying to understand both their views of
    operations of your present systems, the views that they may
    have about any potential expansion or curtailment. So if I were
    to ask you, switching my role from this position to sitting on
    the Senate Finance Committee, which has to find a way to fund
    this, would your ridership support an increase in a revenue
    source if it is dedicated to the transit system? What would
    they say?
        Mr. Casey. I would say yes. I think the bottom line, our
    riders want improved service. They want more frequent service.
    They want better facilities. And in the region, I think as
    happened in the State of Pennsylvania, at least our region was
    almost unanimous in supporting a transportation bill. And I
    really think the riders and the citizens of that region would
    support the same.
        Chairman Menendez. Dr. Scott.
        Ms. Scott. I absolutely believe that our public would. I
    think that there are two pieces to that, however. I think that
    they will support, but they have to be very clear about what
    the outcomes are that are intended, and it is about much more
    than ridership, OK?
        And the other is I believe--and I just think that people
    want accountability, OK? And so the issue, the focus in terms
    of performance and transparency, but absolutely tied to
    outcomes that they can be real clear about they want, OK, and
    with real good transparency and accountability I believe it--
    and I have another one I would like to just--I forgot to say,
    and that is that I--you asked the question. I think that at the
    Federal level, to make sure that every dollar that we do--and
    you can force this, OK--is to make sure that we make smart
    investments. So for every dollar, let us make it be a smart
    dollar, and so that means that everything we can do in terms of
    technology we need to be looking at, and also what we can do in
    terms of resilience.
        Along our corridor, anything that we do, I tell--this is in
    the capital program. The water tables are changing. Don't you
    bring me stuff that was built for 100 years ago, OK? We have to
    be looking for the future, and so those are, once again, themes
    in terms of outcomes that you can drive at the Federal level to
    make every investment we make smart, and also that means that
    on the research and development end, we are woefully behind in
    this country, and making investments, because there have been
    slashes in our research and development funding for
    transportation, and it is sorely, sorely needed.
        Chairman Menendez. Mr. Thomas.
        Mr. Thomas. The voters within our service area certainly
    have proven over the years that they are supportive of transit
    and dedicated funding. When they initially voted to approve a
    1-percent sales tax in 1983 to create an organization that at
    the time they had no idea what it would do or what it would be
    capable of doing, and then subsequently have voted by large
    margins to allow us to issue long-term debt and other
    opportunities. So, yes, sir, I believe so.
        Chairman Menendez. Senator Warren.
        Senator Warren. No. Thank you.
        Chairman Menendez. Well, let me take advantage of one
    final. I promise this will be the final.
        You know, we have a debate in the Committee as it relates
    to gas tax dollars, which the advocates for highway--and, of
    course, we are always going to have highways as part of our
    overall system. But they say, well, a gas tax dollar should not
    be used for a transit purpose because, you know, it is the
    drivers who pay the gas tax who ultimately are funding transit
    systems. Increasingly, however, we have been seeing general
    fund dollars be used in this respect for funding the overall
    transportation bill. And it seems to me that as we use more
    general fund dollars, that argument is increasingly dissipated
    at the end of the day because general fund dollars are paid by
    everybody.
        So any perspectives on that? I do not know how you deal
    with it in your respective States.
        Mr. Casey. Well, I have two comments. The vast majority of
    our riders also drive automobiles, and they are paying the tax
    also. But the investment in transit----
        Chairman Menendez. So they take the transit, let us say, to
    go to work, but then they have their car for----
        Mr. Casey. Or they drive to the parking lot and then take
    the train coming in. But the vast majority of the people that
    still use, benefit from transit, from a congestion standpoint,
    getting riders off the road, it works hand in hand. And I can
    tell you there is not sufficient highways within Philadelphia
    currently to handle all the automobile traffic. Without
    transit, you know, it would be literally a parking lot.
        So the transit benefits everyone, everyone in the region,
    whether it is the people riding transit or the people on the
    highways.
        Chairman Menendez. But that would have its own economic
    consequence. If you end in a parking lot, you are not getting
    your sales force to their sales; you are not getting your
    workers to work on time, and so many other iterations.
        Does anybody else want to comment on this last question?
        Ms. Scott. I would just say, ``Ditto.'' I tell them, I say,
    ``Get out of that old thinking,'' OK? All this silo and this is
    a road dollar and this is a transit dollar and this is a ped
    dollar. We are all talking about mobility and access. Nothing
    is free. Everybody--and we are also integrated and
    interconnected that I just think that that is totally old
    thinking and that we just need to step it up and move it up and
    not disregard it, but do not get stuck in it.
        Chairman Menendez. Well, we may have you visit some of our
    colleagues.
        [Laughter.]
        Chairman Menendez. You might want to think about how you
    answer in that regard. Mr. Thomas.
        Mr. Thomas. Some of our strongest partners in North Texas
    are TxDOT and North Texas Tollway Authority, understanding, as
    Mr. Casey said, it is a collaborative opportunity.
        Ms. Scott. It is, absolutely.
        Chairman Menendez. Well, let me thank all of our witnesses
    for appearing before the Committee. It is very helpful in
    developing record, and some of the issues that will undoubtedly
    be debated among Members, I think the testimony makes a
    powerful case for the need for strong investments to bring our
    transit system to a state of good repair. I look forward to
    working with all of you and others to develop a transit title
    that can begin to meet some of these needs for the next surface
    transportation bill.
        This record is going to remain open until a week from today
    if any Senators wish to submit questions for the record. We
    would ask our witnesses, if you do receive questions, to please
    respond to them as expeditiously as possible. They are helpful
    in dealing with some of the questions that we have.
        With that, this hearing is adjourned.
        [Whereupon, at 10:48 a.m., the hearing was adjourned.]
        [Prepared statements and additional material supplied for
    the record follow:]
                      PREPARED STATEMENT OF DORVAL CARTER
                 Chief Counsel, Federal Transit Administration
                                  May 22, 2014
        Chairman Menendez, Ranking Member Moran, and Members of the
    Subcommittee, thank you for inviting me here today to discuss the
    urgent need to address our Nation's serious public transportation
    infrastructure deficit and to highlight the Obama administration's plan
    to bring our aging rail and bus systems and facilities into a state of
    good repair as part of the GROW AMERICA Act. Transit ridership is at
    its highest level in generations--exceeding 10 billion trips annually
    for 7 years in a row. This trend is likely to continue, as the United
    States' population increases up to an estimated 400 million people by
    2050; as a large segment of aging Americans seek to remain independent
    and mobile without the use of a car; as more people choose to settle in
    urbanized areas where private automobiles are less necessary; and as
    younger Americans continue to generally spend less time behind the
    wheel and more time taking public transportation.
        It is absolutely essential for our Nation to invest in safe,
    modern, reliable, efficient, and affordable public transportation
    networks that tens of millions of Americans increasingly depend on
    every day to reach jobs and job training, education, health care, and
    other opportunities. This means striking a responsible balance between
    investing in new capital transit construction while also preserving and
    modernizing existing infrastructure--portions of which were built over
    a century or more ago--and which continues to serve the public on a
    daily basis.
        On the preservation side of this ledger, we have clearly documented
    an urgent need to address a transit maintenance and replacement backlog
    that stands conservatively at $86 billion (in 2010 dollars)--10 percent
    higher since the Federal Transit Administration (FTA) and the Federal
    Highway Administration (FHWA) last reported in March 2012 (using 2008
    data). This backlog is expected to grow by $2.5 billion each year--
    unless we make the investments now to slow or stop the growing
    maintenance deficit. This updated backlog is based on an analysis
    conducted for the 2013 Status of the Nation's Highways, Bridges and
    Transit: Conditions and Performance (known as the C&P report), issued
    jointly by FTA and FHWA in February, 2014.
        While transit remains one of the safest ways to travel, the
    Nation's aging transit infrastructure carries hidden costs that we
    cannot and should not ignore. Aging transit assets compromise system
    resiliency. In the wake of Hurricane Sandy, for example, the damaged
    PATH commuter rail system, which operates critical service between New
    York and New Jersey, had to replace antiquated circuit breakers and
    other parts that are no longer manufactured, in order to restore
    service between Journal Square and Newark Penn Station. PATH literally
    had to truck in parts from the Chicago Transit Authority--which also
    uses comparably aged parts in its system. This example serves to
    illustrate that there are significant costs to maintaining equipment
    that has exceeded its useful life, with sacrifices made in flexibility,
    fuel efficiency, and reliability.
        Above all, the transit industry's serious deferred maintenance and
    replacement backlog directly affects average transit riders every day--
    including transit systems in States represented by Members of this
    Subcommittee. For example:

        In New Jersey, roughly a third of countywide community
            transit vehicles (over 300 vehicles) have each logged at least
            175,000 miles--a point at which repair bills mount and
            breakdowns occur more frequently.

        In downstate Illinois, nearly 600 buses and paratransit
            vehicles that serve riders with disabilities are operating well
            past their recommended retirement date.

        In West Virginia, 11 locally operating transit systems rely
            on vehicles that exceed FTA's recommended retirement date, with
            more than half the vehicles in two of these agencies in this
            condition, and the others well on the way.

        In State College, Pennsylvania, if funding is not secured
            to replace 66 buses running on compressed natural gas (CNG)
            that have exceeded the FTA-recommended retirement date (many of
            them upwards of 18 years old), then the Centre Area
            Transportation Authority will need to install new CNG tanks
            that cost more than the value of these aging buses.

        In Kansas, the City of Paola provides nearly 45,000 rides
            per year on a single 10-year-old bus, while in Ottaway County,
            10,400 passengers annually depend on two buses that are each
            more than 14 years old.

        In Cleveland, Ohio, 100 percent of the Greater Cleveland
            Regional Transit Authority's heavy rail vehicles are 30 years
            old. And in Butler County, Ohio, the local Regional Transit
            Authority is cannibalizing broken buses for parts to keep a
            small fleet of buses operating--in the face of rising demand
            for bus service.

        In Oakland, California, nearly a quarter of the transit
            buses are 14 years old--past FTA's recommended retirement date.

        Nationwide, about 28 percent of the facilities used by
            local transit agencies to house their operations staff and
            service their vehicles are in a marginal or poor state of
            repair. Inadequate capital funding to replace this type of
            infrastructure affects maintenance efficiency and the welfare
            of the workforce.

        In these States, and many more, millions of transit dependent
    senior citizens, veterans, individuals with disabilities, and others
    take transit to work and school, and to seek the services and care they
    require on a daily basis--and as those transit vehicles age, their
    dependability decreases and gaps in service grow larger, leaving many
    riders stranded, unable to reach the doctor's office or the grocery
    store. For riders who take transit by choice, transit systems thrive
    when they are able to offer a convenient and reliable alternative to
    driving to work and other destinations. Maintaining and preserving
    these systems is critical to ensuring they live up to their potential
    to serve their communities and meet the needs of future riders.
        We recognize that the Senate Banking Committee has generally been
    responsive to FTA's needs for adequate resources to help capitalize the
    construction of the Nation's transit assets. It is important to bear in
    mind, nevertheless, that the transit industry's marginal or poor
    infrastructure condition exists today despite FTA's ongoing financial
    support of rehabilitation and replacement activities, primarily through
    the former Section 5309 Fixed Guideway Modernization funds (replaced
    under MAP-21 with State of Good Repair Formula Grants) and Section 5307
    Urbanized Area Formula Grant funds. Yet the scope of the infrastructure
    deficit persists, and additional resources are needed to address the
    challenge in a meaningful way. Consider, for example, Chicago's transit
    environment. Chicago's transit systems (CTA, Metra, and Pace) received
    about $2.2 billion in Federal funding from FY2009 to FY2013, largely
    through the above-mentioned FTA programs. These operators also received
    about $242 million from the American Recovery and Reinvestment Act of
    2009 (ARRA) (Pub.L. 111-5), which helped to replace buses and conduct
    overdue preventive maintenance and subway rehabilitation. Despite this
    level of investment from multiple sources, according to CTA, these
    transit systems collectively face a $24 billion backlog over 10 years,
    requiring a sustained annual investment of $2 billion to address the
    need.
        We believe the data in the latest C&P Report makes a clear case for
    a sustained, and sustainable, investment plan to address the
    deteriorating condition of our Nation's transit assets and ensure the
    safety and viability of public transportation nationwide for future
    generations.
    FTA's Consistent Call for Transit Asset Improvements
        It was before this Subcommittee almost 5 years ago, in August 2009,
    that Federal Transit Administrator Peter Rogoff testified on the need
    for public transit agencies to achieve and maintain a state of good
    repair in order to provide safe and reliable service to tens of
    millions of daily riders.
        At that time, FTA pledged to make transit infrastructure repair a
    policy priority and a key component of the agency's annual budget
    request. FTA's initial state-of-good-repair initiative included
    encouraging the industry to share ideas on recapitalization and
    maintenance; asset management practices; and innovative financing
    strategies. Over the course of 2008 and 2009, FTA formed a working
    group with the transit industry, convened a state-of-good-repair
    roundtable, and published a seminal Rail Modernization Study in 2009 in
    response to the conference report accompanying the FY2008
    Transportation-HUD Appropriations Act and at the request of a dozen
    senators. That initial study found that more than one-third of the
    assets at the seven major rail transit systems analyzed (Chicago's CTA,
    Boston's MBTA, New York's MTA, New Jersey Transit, San Francisco's Bay
    Area Rapid Transit System, Philadelphia's SEPTA system, and Washington,
    DC's WMATA system) were in marginal or poor condition. Many of these
    systems' assets were near or had exceeded their expected useful life
    and collectively faced an estimated $50 billion maintenance and repair
    backlog. Given that these systems account for about 80 percent of the
    Nation's rail transit ridership, the need for action was clear. An
    expanded version of the study released in 2010 estimated the cost of
    bringing all of the Nation's rail and bus transit systems into a state
    of good repair at $77.7 billion--a snapshot in time that further
    confirmed that serious, targeted investments in this deteriorating
    infrastructure had to be made as soon as possible. Though the numbers
    differ slightly, this estimated need is consistent with the C&P
    Report's estimate--different numbers, same story.
        FTA's Rail Modernization Study also found the transit industry's
    asset management practices were far weaker than they should be.
    Practices such as the use of decision support tools that rank and
    prioritize reinvestment needs, and conducting comprehensive asset
    condition assessments, were largely absent from the industry's regular
    strategic planning processes.
        Every year since the release of these assessments quantifying the
    Nation's transit state-of-good-repair needs, FTA has worked diligently
    to help transit agencies improve their transit asset management
    practices--which is integral to keeping transit safe--and to make a
    clear case for additional resources for state-of-good-repair needs
    through the annual appropriations process. Our success culminated in
    the inclusion of FTA's first formula-based State of Good Repair (SGR)
    Formula Grant Program as part of the Moving Ahead for Progress in the
    21st Century (MAP-21) Act, which is set to expire on September 30,
    2014. This program was an important step forward because it provided
    for the first time 2 years of predictable funding to help transit
    agencies replace and rehabilitate existing assets or undertake capital
    projects required to maintain their systems in a state of good repair.
    The SGR formula program under MAP-21 grew by over $500 million compared
    to the former fixed guideway modernization program. On the other hand,
    funding for bus and bus facility replacement and repair went from $984
    million under SAFETEA-LU to $428 million in MAP-21, which caused a
    devastating blow to transit providers' ability to replace aging buses
    and rehabilitate facilities because of a lack of funds.
    FTA's Current Activities To Improve the State of Good Repair of Transit
            Infrastructure
        Under MAP-21, transit agencies are required to develop a transit
    asset management plan to help them strike a better and more informed
    balance between preservation and expansion needs--in the context of a
    safety-first performance culture. To this end, FTA is actively
    implementing a new National Transit Asset Management System through the
    rulemaking process, supplemented by technical assistance and outreach
    to grantees. This approach represents an innovative and important step
    toward helping the transit industry to obtain better metrics, through
    performance-based planning, which will yield a more accurate picture of
    true need--and thereby enable local decision makers to allocate
    resources more effectively and efficiently systemwide. An Advanced
    Notice of Proposed Rulemaking that aligns the transit asset management
    process with the need for strengthening transit safety was published in
    October 2013. FTA is now reviewing the extensive comments received and
    plans to publish a Notice of Proposed Rulemaking guided by this input
    by early 2015. The purpose of a National Transit Asset Management
    System is to:

        Define a state of good repair.

        Establish a state-of-good-repair performance measure, and
            require funding recipients to set state-of-good-repair
            performance targets.

        Require recipients and subrecipients to develop a transit
            asset management plan.

        Add the reporting of capital asset inventories and
            conditions to the National Transit Database.

        MAP-21 provided FTA additional tools to help the transit industry
    come to grips with its state-of-good-repair challenges. We fully
    recognize that to address the scope and complexity of this challenge,
    we need a range of policy tools at our disposal, including not only
    transit asset management, but also public-private partnerships such as
    the Denver Eagle project and innovative financing mechanisms, such as
    the Transportation Infrastructure Finance and Innovation Act (TIFIA)
    and the Railroad Rehabilitation & Improvement Financing Program (RRIF).
        All of these actions, taken together, reflect the U.S. Department
    of Transportation's strategic commitment to address the infrastructure
    deficit in a holistic fashion--and to help the industry employ better
    metrics that enable them, in turn, to be better stewards of their
    assets. However, under MAP-21, our efforts still do not go far enough.
    The current State of Good Repair Formula Grant Program focuses on rail
    and bus rapid transit (BRT) systems that are at least 7 years old. The
    preservation needs of non-BRT bus services are not addressed in MAP-21.
    The need for additional investments and innovative policies that
    address the backlog for all bus and rail maintenance still exists, and
    much more work remains to be done--as the data in the C&P Report
    indicates, and as the President's FY2015 Budget and GROW AMERICA Act
    proposal make clear.
    2013 C&P Report Substantiates Need for Further Investment
        The 2013 C&P Report, which is based on 2010 data, makes a case
    rooted in facts that our Nation is falling behind on its obligation to
    maintain, preserve, and protect the transit assets serving thousands of
    communities nationwide today. The report finds that:

        Significant funding commitments are needed. As much as
            $24.5 billion in capital spending is needed per year from
            FY2011-FY2030 to improve the condition of transit rail and bus
            systems and support expansion to meet growing ridership needs.
            This is a nearly 50 percent increase over current capital
            spending levels from all government sources (Federal, State,
            and local).

          Removing expansion investment from the equation, we need
            $18.5 billion in average annual investments (from all
            government sources) during the same period just to eliminate
            the current $86 billion maintenance backlog.

          A minimum of $2.5 billion annually is needed just to
            maintain the status quo, that is, to prevent the current
            backlog from escalating further.

          Our current rate of reinvestment (about $10.3 billion
            from all sources) is not sufficient to reduce the backlog in
            any meaningful way.

        Rail systems are heavily affected by the backlog. Rail
            systems collectively account for about 63 percent of the total
            state-of-good-repair backlog. Some transit systems are still
            operating rail cars that are over 30 years old, but the report
            also highlights that over 75 percent of the need for repairs
            affects other facets of transit rail infrastructure, such as
            rail stations, trestles, and power substations. Indeed,
            nonvehicle rail assets pose the biggest challenge to achieving
            a state of good repair.

        State and local governments bear the burden. State and
            local governments are shouldering more than half the cost of
            annual investments to preserve and grow the Nation's transit
            systems. Indeed, public funds made up nearly 75 percent of
            dollars expended on investments in capital projects and transit
            operations in 2010, with State and local sources leading the
            way.

        Preventive maintenance expenditures increasingly consume
            Federal grant funds. From 2000 to 2010, Federal funding for
            transit operating needs increased 360 percent. More than half
            of that--56 percent--was driven by capital grant funds used for
            preventive maintenance needs.

        A key question that arises from the C&P Report data is why the
    transit maintenance backlog continues to grow, despite concerted
    efforts to chip away at it over the last several years. Various factors
    contribute to the continued increase, including the fact that, as
    transit agencies implement asset management best practices and improve
    their ability to conduct more detailed and accurate needs assessments,
    their reported data reveals a more fine-grained analysis of asset
    replacement needs and their costs. Additionally, the targeted
    investments made in recent years to address this problem simply do not
    match the depth of the infrastructure deficit overall, which has built
    up over decades of underinvestment.
    The Administration Remains Committed To Addressing the Infrastructure
            Deficit
        In his FY2015 budget request for the U.S. Department of
    Transportation and the FTA, President Obama builds on the commitment
    begun in MAP-21 with a request of $7.7 billion for the existing State
    of Good Repair Formula Grant Program and the Bus and Bus Facilities
    Grant Program. This represents an increase of $5.1 billion over the
    FY2014 funding levels for these two programs.
        The Administration believes, in light of the history and data
    presented here and the progress made to date, that this increase is
    essential to help bring our national rail transit infrastructure into a
    state of good repair--while also enabling transit agencies to replace
    aging buses and bus facilities. (The increase on the rail side is $3.6
    billion, or 164 percent, over FY2014 enacted levels; the increase on
    the bus side is $1.5 billion, or 353 percent, over FY2014 enacted
    levels.)
        The FY2015 budget is a downpayment on a 4-year, $302 billion
    reauthorization proposal, known as the GROW AMERICA Act, which will
    strengthen surface transportation nationwide. The GROW AMERICA Act
    commits more than $72 billion over 4 years to address the urgent
    transit challenges facing urban, suburban and rural communities. The
    Act represents a nearly 70 percent increase in authorized transit
    funding over MAP-21.
        In keeping with the momentum of MAP-21, the GROW AMERICA Act would
    provide $23 billion over 4 years (FY2015-FY2018) to continue efforts to
    address the transit industry's infrastructure deficit and maintenance
    backlog. By increasing the level of predictable funding for state-of-
    good-repair needs, transit agencies--along with State and local
    governments already shouldering more than half the cost of the annual
    investments to preserve and grow the Nation's transit systems--will be
    better positioned to provide safe, reliable transportation services to
    meet rising demand.
        In addition, to address the critical need to replace aging bus
    fleets, which provide transportation to nearly half the transit riders
    in America, the GROW AMERICA Act would provide $7.8 billion in formula
    and discretionary funds over 4 years to ensure that communities have
    the resources needed to modernize bus fleets and facilities, lower
    repair bills, improve fuel efficiency, and better serve millions of
    riders. Nearly 40 percent of the Nation's buses and bus facilities are
    in marginal or poor condition--as the examples cited above illustrate--
    and significant investment is needed to bring them into a state of good
    repair. This proposal remedies an acknowledged shortfall in MAP-21 and
    helps put bus fleets on the path to modernization.
        In closing, the investment in public transportation's future that
    we need to make is an investment in thousands of good jobs in
    communities nationwide that help to strengthen middle-class families;
    an investment in local economic growth and neighborhood revitalization;
    an investment in reducing roadway congestion that plagues so many
    metropolitan areas; an investment in lowering our dependence on foreign
    oil; and an investment in helping our Nation compete with the rest of
    the world as we find new and better ways to move people efficiently and
    safely.
        We recognize that striking an appropriate balance between growing
    our transportation infrastructure to meet future demand and reinvesting
    in our current system is not easy to achieve. It will require targeted
    investments from all sources--Federal, State, local, and the private
    sector--to make meaningful changes.
        Mr. Chairman, this concludes my testimony and I would be happy to
    answer any questions.
                                     ______

                     PREPARED STATEMENT OF JOSEPH M. CASEY
     General Manager, Southeastern Pennsylvania Transportation Authority,
                           Philadelphia, Pennsylvania
                                  May 22, 2014
        Chairman Menendez, Ranking Member Moran, and Members of the
    Subcommittee, thank you for the opportunity to testify on the Federal
    role in bringing the Nation's public transportation infrastructure to a
    state of good repair. I am Joseph Casey, General Manager of the
    Southeastern Pennsylvania Transportation Authority (SEPTA).
    About SEPTA
        SEPTA was formed by an act of the Pennsylvania General Assembly to
    provide public transportation services to the five counties of
    southeastern Pennsylvania (Bucks, Chester, Delaware, Montgomery, and
    Philadelphia). Between 1964 and 1983, SEPTA assumed ownership and
    operation of various transportation companies, including the
    Philadelphia Transit Company (PTC), the Philadelphia and Western
    Railroad (the P&W or Red Arrow), and a commuter railroad system from
    Conrail that was originally constructed by the Pennsylvania and Reading
    Railroads. Today, SEPTA is the sixth largest public transportation
    operator in the country, and the largest in Pennsylvania.
        SEPTA's service territory covers 2,220 square miles and four
    million residents living in the five-county region, with service
    extending to Trenton and West Trenton, New Jersey and Newark, Delaware.
    SEPTA is a multimodal transit system which provides a vast network of
    fixed-route services including 119 bus routes, two subway/subway
    elevated lines, 13 Regional Rail lines, eight trolley lines, three
    trackless trolley routes, an interurban high-speed rail line, and
    paratransit service. SEPTA provides more than one million daily
    passenger trips, and during the fiscal year that ended June 30, 2013,
    SEPTA recorded 337.3 million (unlinked) passenger trips. Regional Rail
    ridership has increased 50 percent, over the last 15 years, with annual
    ridership up from 24 million to an all-time record 36 million trips
    last year. Ridership continues to grow across all modes, with average
    annual increases of 1.9 percent over the last 7 years, and total annual
    trips up by more than 40 million since 2006.
        Our Nation's economic competitiveness and long-term prosperity rely
    upon the ability of its extensive and interconnected transportation
    network to safely and efficiently move people and commerce throughout
    the country, and connect U.S. markets to the world. Maintaining the
    infrastructure that supports the Nation's highway, transit, freight and
    intercity passenger rail systems is an established national priority,
    and Congress must preserve the Federal Government's 50-plus year
    commitment to public transportation, and preserve and strengthen the
    Mass Transit Account of the Highway Trust Fund.
        Last year, Americans took 10.7 billion trips on public
    transportation. Yet, at a time when transit ridership reached its
    highest levels in 57 years, the industry continues to fall behind in
    the investment required to bring our transit systems to a state of good
    repair.
        According to the 2013 Conditions and Performance Report released by
    the U.S. Department of Transportation in February, the state-of-good-
    repair backlog for transit systems nationwide has risen to $86
    billion--an increase of $9 billion, or nearly 12 percent, since the
    FTA's 2010 National State of Good Repair Assessment. This number is
    projected to grow by $2.5 billion per year, and the Report states that
    total spending on state of good repair from all sources must increase
    by $8.2 billion per year to address this backlog.
        The funding and operational pressures related to state of good
    repair are particularly acute for large urban transit systems with
    aging rail infrastructure. Infrastructure related to rail
    transportation--track, power equipment, bridges and tunnels, stations
    and vehicles--accounts for roughly three quarters of the national
    transit state-of-good-repair backlog. It is important to note that
    older systems--such as ours in Philadelphia--were built largely without
    the benefit of Federal support.
        In MAP-21, Congress responded to the rail state-of-good-repair
    crisis by creating the new state-of-good-repair grant program and
    increasing funding for the Nation's rail transit systems to invest in
    their critical state-of-good-repair needs.
        On behalf of transit riders in our region, I want to thank this
    Committee for its role in making that program a reality. Creating that
    program was a major goal for SEPTA and our colleagues in other regions.
    In pursuit of that goal, leaders of the Nation's largest transit
    systems formed in 2007 an informal group we call the Metropolitan Rail
    Discussion Group (MRDG). Since 2010, I have served as Chair of MRDG.
    Our basic principles include the following:

        Passage of a 6-year transportation authorization with
            predictable, growing sources of funding.

        Increased Federal investment to modernize our Nation's
            public rail transportation systems given their significant
            impact on issues of national importance such as jobs, economic
            development, congestion relief, and air quality.

        Funding within the Federal transit program should be
            prioritized according to need and with consideration of the
            impact of that funding on the issues of national importance.

        It is important to emphasize that first principle--a predictable
    and growing source of funding. As I noted earlier, the state-of-good-
    repair backlog is growing quickly at our Nation's transit systems. Our
    investment, therefore, must also increase so we do not fall farther
    behind.
        Our experience at SEPTA demonstrates the need for investment and
    the cost of not investing. Our current backlog of unmet infrastructure
    needs is now more than $5 billion dollars--nearly three-quarters of
    which is concentrated in SEPTA's aging rail infrastructure. SEPTA's
    Regional Rail and rail transit network is extensive, and much of the
    infrastructure that supports it has exceeded its useful life and
    requires replacement. For example:

        Much of SEPTA's Regional Rail system was originally built
            in the mid-to-late-19th century. The average age of SEPTA's
            railroad bridges is more than 80 years old, with 103 bridges
            that are more than 100 years old.

        Fifteen of SEPTA's 20 traction power substations
            responsible for powering large segments of the Regional Rail
            system have been in continuous operation for more than 80
            years, and are still relying on technology originally developed
            in the 1920s.

        The Authority's 231 Silverliner IV railcars (representing
            approximately two-thirds of SEPTA's Regional Rail fleet) are
            nearly 40 years old. More than 150 city and suburban trolley
            cars have already exceeded their 30-year useful life, and will
            need to be replaced within 10 years.

        Over the next decade, SEPTA will need to invest $6.5 billion--
    approximately $650 million per year--just to bring the system to a
    state of good repair, including:

        $572 million to repair power substations and other power
            infrastructure

        $716 million on systemwide track and tie renewal

        $1.2 billion on systemwide Regional Rail and rail transit
            station rehabilitation and ADA improvements

        $976 million for critical bridge replacement,
            rehabilitation, and maintenance

        $2 billion on rail vehicle replacement

        These cost realities are further exacerbated by funding pressures
    created by several unfunded Federal mandates, including Positive Train
    Control (PTC), and changes included in the Passenger Rail Investment
    and Improvement Act (PRIIA) that increase fees paid to Amtrak.

        SEPTA made a commitment to achieving full compliance with
            the PTC mandate and is on schedule to make the December 31,
            2015, implementation deadline. However, in doing so, SEPTA will
            ultimately divert more than $305 million away from critical
            state-of-good-repair projects, including bridge and power
            substation rehabilitation.

        Starting in Federal Fiscal Year 2015, SEPTA's annual
            capital and operating contribution requirements for rights to
            operate over Amtrak territory were increased as a result of
            language in PRIIA.

        The cumulative effect of growing needs and level funding creates
    challenges to maintaining safe and efficient transit operations. By
    focusing on safety and adopting a ``fix-it-first'' approach, the
    Authority has been successful in sustaining service levels and ontime
    performance by directing capital resources to its most critically
    deficient infrastructure. This investment approach has guided our use
    of Federal funds in recent years from MAP-21 and the American Recovery
    and Reinvestment Act (ARRA). Here are some examples of how we have
    invested the funds Congress has made available to us:
        American Recovery and Reinvestment Act--SEPTA has a strong track
    record of implementing capital projects quickly, especially after being
    awarded Federal funding from nontraditional sources. This is best
    exemplified by SEPTA's execution of its American Reinvestment and
    Recovery Act (ARRA) projects. SEPTA received $191 million in ARRA funds
    and advanced 32 projects. All major construction contracts were awarded
    within 1 year; and all projects were completed in less than 3 years.
        Wayne Junction Regional Rail Substation--Built in 1931 for the old
    Reading Railroad lines, Wayne Junction Substation is a central facility
    that distributes electricity to 11 outlying substations and feeds
    catenary wires for half of SEPTA's Regional Rail lines. A failure at
    the Wayne Junction Substation would cause major disruption throughout
    the entire regional rail network. In partnership with the City of
    Philadelphia and the Pennsylvania Department of Transportation
    (PennDOT), SEPTA was awarded $12.8 million in funding through the
    Federal 2012 Transportation Investment Generating Economic Recovery
    (TIGER) program for the renovation of the 80-year-old Substation. State
    and local sources provided matching funding in the amount of $12.9.
    Construction is underway on this critical project.
        Hybrid Bus Replacement--SEPTA's current fleet of more than 1,400
    buses includes 472 diesel-electric hybrid buses--approximately one-
    third of the total fleet. SEPTA was successful in securing Federal
    competitive grants to assist in funding its hybrid bus replacement
    program. SEPTA expects to take delivery of an additional 205 hybrid
    buses, continuing to make SEPTA one of the largest public transit
    operators of this cleaner more efficient engine technology.
        Silverliner V Railcar Procurement--SEPTA was able to leverage
    former FTA Section 5309 formula funding to secure the issuance of
    GARVEE Bonds that financed the purchase of 120 new Regional Rail cars
    to replace cars which were more than 40 years old and exceeded their
    useful life. The new railcars fully comply with American with
    Disabilities (ADA) requirements and meet Federal Railroad
    Administration (FRA) passenger car strength and safety requirements.
    Final assembly of the new cars took place at the Hyundai-Rotem facility
    in South Philadelphia where up to 300 jobs, including those of
    mechanics and electricians, were created to assemble the cars. Without
    a long-term Federal formula program, SEPTA would not have been able to
    utilize this funding mechanism to make this important safety and
    efficiency upgrade to its rail fleet.
        Climate Change Adaptation Assessment Pilot Program--In 2011, SEPTA
    was selected for funding as one of seven pilot projects undertaken
    through the Federal Transit Administration's Climate Change Adaptation
    Assessment Pilot Program. The recommendations of the FTA Pilot Program
    report, which are now codified within SEPTA's ``Standard Readiness Plan
    for Hurricanes'', are the foundation of SEPTA's Hurricane Sandy
    Resiliency Grant application. The grant application included 15
    selected projects which will reinforce power systems for critical
    facilities, stabilize embankments prone to erosion, restore track
    integrity, improve hydrologic conditions, and prevent infrastructure
    degradation due to water infiltration. The application reflects SEPTA's
    overarching goal to improve resilience against costly damage and
    passenger delays, and to ensure ongoing continuity of operations, in
    the event of known and emergent vulnerabilities associated with extreme
    weather.
        Of course, the Federal Government provides only a portion of the
    funds required to maintain and improve our transit system. The
    Commonwealth of Pennsylvania is a critical partner for us as well.
        In Pennsylvania, Governor Tom Corbett and bipartisan leaders in the
    Pennsylvania General Assembly authored a comprehensive transportation
    funding plan that provides dedicated and growing investment in the
    State's transportation infrastructure. Transit infrastructure
    rehabilitation was one of the cornerstones of the bill, and funding was
    made available for SEPTA to begin to address its most urgent
    infrastructure needs.
        Our story in Pennsylvania is not unique. My colleagues in other
    regions are working to address the state-of-good-repair backlog through
    the resources of their own State and local governments as well. Indeed,
    the DOT report referenced previously notes that in 2013, State and
    local governments shouldered more than half the burden for investment
    in state of good repair for public transportation. Our leaders are
    doing this because they recognize the high cost of inaction.
        We had to illustrate clearly the cost of inaction in order to build
    support for the Pennsylvania funding plan. As the bill was being
    discussed, the Authority was developing a plan that would have
    realigned the SEPTA system to service levels that could be safely
    supported under the constraints of persistent, long-term capital
    funding shortfalls. This realignment plan was necessary because of 4
    years of severely reduced capital budgets and long-range funding
    uncertainty. If the plan had been implemented, more than 88,000 daily
    rail passenger trips would have been eliminated over the next decade.
    The congestion impacts would have been staggering.
        The legislature recognized this was not a ``Chicken Little'' plan.
    It was a sober look at the cost of not investing in our transportation
    networks. That is a key point I want to make to this Subcommittee
    today: we spend too much time focusing on the cost of Government
    programs for infrastructure and not enough time focusing on the
    crippling cost of NOT investing in infrastructure.
        In southeastern Pennsylvania, SEPTA is the engine of the regional
    and State economy, providing more than one million daily passenger
    trips. SEPTA has achieved record ridership during a national economic
    downturn, in spite of stagnant capital funding that has delayed
    systemwide improvements, and without expanding service. This ridership
    growth reveals two things: residents of southeastern Pennsylvania are
    increasingly choosing public transportation as their principal mobility
    option, and SEPTA's effective use of public investment is paying great
    dividends in customer satisfaction and rider retention.
        To understand the entire cost of not investing, though, we need to
    look beyond ridership impact to the broader economic benefits of public
    transportation in our major metro areas. These areas rely on public
    transportation to fuel economic growth and competitiveness by
    connecting employees to their jobs, allowing freight and vehicle
    commuters to move on less congested highways, and providing important
    mobility options for all members of the community.
        While the benefits of investing in our system are mostly felt by
    the people and businesses in our service area, the economic impact of
    SEPTA transcends our regional boundaries.
        SEPTA's capital and operating expenditures contribute $3.21 billion
    in economic output, supporting nearly 26,000 jobs. Hundreds of
    companies--large and small--across Pennsylvania and the country also
    benefit from doing business with SEPTA. Each year, SEPTA procurement
    returns hundreds of millions of dollars to the national economy,
    supporting business and creating jobs. Between 2009 and 2012, SEPTA
    purchased more than $1 billion in goods and services from Pennsylvania
    companies, and an additional $850 million from businesses throughout
    the country.
        The Nation's economy is damaged when our major metro areas cease to
    function efficiently as gateways for the movement of goods and people
    between U.S. and international destinations. A short-term ``patch'' on
    the Highway Trust Fund highway and transit accounts will not address
    the crucial shortfall in investment. If Congress takes that approach--
    either for 6 months, a year, or 2 years--it will be sending a signal to
    State and local officials that they do not have a partner in
    Washington.
        Now more than ever, States need to know they have a strong and
    committed Federal partner in the preservation of the Nation's
    transportation infrastructure.
        With all these points in mind, I urge this Subcommittee and the
    full Committee to develop a plan for a multiyear public transportation
    investment program with funding levels that show increases from year-
    to-year to reflect the growing needs across the country. A robust and
    growing state-of-good-repair program should be a centerpiece of the
    national transit program.
        Thank you for the opportunity to testify today and I look forward
    to answering your questions.
                                     ______

                     PREPARED STATEMENT OF BEVERLY A. SCOTT
        General Manager and Chief Executive Officer, Massachusetts Bay
                            Transportation Authority
                                  May 22, 2014
        Chairman Menendez, Ranking Member Moran, and Members of the
    Committee, thank you for inviting me to testify before you today on
    this important issue. The Massachusetts Bay Transportation Authority is
    the fifth largest transit provider in the United States, with more than
    1.3 million passenger trips per day and in excess of 395 million trips
    per year. The MBTA system is the original and oldest transit network in
    the U.S., with the subway opening in 1897 and expanding throughout the
    20th century. The commuter rail system was originally laid out in the
    1830s as some of the first railroads in the U.S. Some of the MBTA bus
    facilities date to the early 20th century, having been initially
    designed to serve horse-drawn omnibuses. With this great history in
    transit comes some of the oldest and in many cases outdated
    infrastructure. Operating this important network in a State of Good
    Repair (SGR) is a significant challenge for the MBTA and for which we
    are heavily engaged with our Federal partners at the FTA to work with
    us to keep this system operating in a safe, reliable, accessible, and
    sustainable manner.
        Under the leadership of Governor Patrick, Massachusetts has taken
    great steps to address the growing SGR backlog that existed at the
    MBTA. The backlog encompasses all those assets that are past their
    useful lives and in need of investment for replacement/renewal (e.g.,
    vehicles, bridges, tracks, stations, facilities, power, signal, and
    communication systems, etc.). When Governor Patrick came into office in
    2007, the MBTA's SGR backlog was upwards of $5 billion, with only a
    small portion of that funded annually through our capital program. The
    Patrick administration recognized that this issue is one that cannot be
    further deferred and has taken action to implement important
    transportation reforms. These reforms include employee health care,
    retirement benefits, and other administrative programs that are
    designed to maximize efficiencies, eliminate redundancy, incorporate
    innovative technology, and focus on sustainability to bring stability
    to rising transit costs and limited revenues.
        After launching these comprehensive transportation reforms,
    Governor Patrick proposed the Way Forward program to provide the
    necessary funding for the transportation system. Governor Patrick
    worked with the Massachusetts Legislature to implement strategies that
    generate new State revenues dedicated to funding transportation. These
    new revenues include the first increase in over 20 years of the State
    gasoline tax. This increase is aligned with inflation to ensure that
    the level of funding will keep pace over time. The plan was approved by
    the Legislature in 2013 and will generate over $800 million in new
    revenue for transportation, which, when leveraged, will support $2.6
    billion to address the MBTA's SGR backlog over the next decade. The Way
    Forward Program provides reliable and predictable revenue to address
    the most pressing needs of the MBTA, which include new vehicles,
    upgraded track, electric traction power, signal and communications
    improvements as well as investments in bridges and facilities.
        While focusing on the present, the Governor has continued to look
    toward the future by investing in new projects. One notable project is
    the Green Line Extension, which we anticipate will receive a 50 percent
    funding grant from the FTA's New Starts Program. This transformative
    project will bring transportation, land use, environmental and economic
    development benefits to areas currently under served by transit.
        The MBTA has allocated funding with a focus on safety, security,
    and service reliability. We have also focused our investments to create
    secondary benefits, such as promoting private commercial and
    residential development at transit stations. We have also focused on
    developing infrastructure that will consume less energy, investments to
    make the system more accessible to people with disabilities and to an
    aging population, and making the system more resilient to extreme
    storms and the oncoming effects of climate change.
        Additionally, the MBTA has changed the way we make decisions on
    future investments, and implemented systems to track and measure those
    investments. We have developed tools to focus our long term capital
    investment decisions, including a strong asset management program and
    SGR database. Consistent with MAP-21, we have integrated an overall
    focus on investment outcomes, using performance metrics and other tools
    to measure the value of investments.
        It is important not to lose site of the nexus between our SGR and a
    skilled future workforce. We need to ensure that tomorrow's workers
    have the skills and training necessary to build, install and maintain
    this equipment, such as signals and communications, power systems,
    engineering, information technology and the other fields that we will
    rely on even more in the future to build and maintain this
    infrastructure.
        The MBTA recognizes the need for fiscal responsibility when it
    comes to funding our SGR backlog. We anticipate spending nearly $6
    billion over the next 5 years, with more than 60 percent of those funds
    being local funds. Despite the significant local investment, there is a
    critical need--particularly for older rail agencies--for a strong and
    robust Federal investment in SGR. As we face record-high transit
    ridership on increasingly aging systems, reaffirming the Federal
    commitment to the millions of Americans who ride public transportation
    is more essential than ever. Transit agencies across the country see an
    increased need for vigorous Federal funding in the next surface
    transportation authorization bill given that Federal investment in
    transportation is an investment in American jobs, American communities,
    American strategies to address climate change and American economic
    competitiveness.
        Delivering safe, reliable, and accessible public transit has always
    been a partnership between public sector agencies at all levels of
    government working with communities and stakeholders. While the MBTA
    and many other transit agencies have made significant investments using
    local funds, a reliable and predictable level of Federal funding is
    needed if we are going to seriously address the significant SGR backlog
    faced by transit agencies such as the MBTA. We are hopeful that this
    Congress, through its upcoming Transportation Reauthorization Bill, can
    begin to address this critical need by supporting the funding levels
    that were proposed in the Administration's reauthorization proposal.
        Thank you for this opportunity to testify and I am happy to take
    any questions you may have.
                                     ______

                       PREPARED STATEMENT OF GARY THOMAS
          President and Executive Director, Dallas Area Rapid Transit
                                  May 22, 2014
        Thank you Mr. Chairman. My name is Gary Thomas and I am the
    President/Executive Director of Dallas Area Rapid Transit (DART). DART
    was created on August 13, 1983, when North Texans in and around the
    city of Dallas voted to commit 1 percent local sales taxes to fund
    public transportation. Today DART is a multimodal transit agency
    operating North America's longest light rail system in the fourth
    largest metropolitan area in the United States. DART provided
    approximately 2.3 million people inside its 13 city, 700-square mile
    service area with around 107 million total transit trips in FY2013
    through our bus, light rail, commuter rail, HOV, Paratransit, and Van
    Pool programs.
    State of Good Repair Is a DART Priority
        As DART continues maturing as a transit operator, a significant
    portion of the agency's expenses will shift to the maintenance and
    replacement of infrastructure and vehicles. In fact, approximately 73
    percent of DART's capital spending over the next 20 years is dedicated
    to State-of-Good-Repair (SGR) projects. This is due to an agency
    policy--in place since our creation--that mandates we balance the
    expenses of operations, asset management, and capital expansion through
    a 20-Year Financial Plan.
        The financial planning parameters provide the foundation for the
    ongoing balance and recalibration of capital systems expansion,
    operating costs, and asset condition and replacement. This has allowed
    DART to meet the challenge of both maintaining the operational
    readiness of our current assets while meeting our commitments to the
    region for further expansion of the transportation network. Between
    2001 and 2010, DART doubled its light rail system twice, despite a
    regional economy that was experiencing double-digit unemployment and
    flat or lesser sales tax revenue. In other words, the expansion was
    carried out, and infrastructure maintained, with no growth in the
    source that represents approximately 75 percent of the agency's annual
    revenue.
        Even amidst the worst national economic crisis since the Great
    Depression, DART has been fortunate to continue to move forward with
    major capital projects by following the guidance of its financial plan
    developed by these sound planning parameters. The 28-mile Green Line,
    which received a $700 million Full Funding Grant Agreement under the
    Federal Transit Administration's New Starts program in 2006, was
    completed and in revenue service by late 2010. Additionally, both the
    Orange Line and Blue Line extensions were completed and in revenue
    service in 2012. Improving local economic conditions and the success of
    our multiyear financial and budgetary initiatives have made possible
    the acceleration by three years of the South Oak Cliff Blue Line
    extension to the University of North Texas-Dallas campus. Finally, DART
    is currently replacing our entire bus fleet with new compressed natural
    gas fueled vehicles. This began in the fall of 2012 and will be
    complete in 2016.
    The DART Approach to State of Good Repair
        DART has well over 15 years of asset condition assessment
    experience. The commitment to a regular interval of assessment by a
    trained team of internal assessors has provided DART with sound
    comparative data to determine adequacy of our long range financial,
    maintenance, and asset replacement plans.
        One of the key elements of DART's SGR program is the Asset
    Condition Study. The goals of this regularly scheduled asset assessment
    are: to obtain high level assessment of the inventory of assets;
    provide comparative results to previous assessments; ensure rate of
    physical degradation is consistent with plan; validate maintenance and
    financial plans are aligned with assessment results; and support
    adjustment of maintenance and financial plans where necessary. Included
    in any successful SGR program is the assessment of technology and
    reconciling the need for its replacement due to obsolescence.
        In addition, DART's capital program request process employs a
    multidimensional assessment of each project request based on industry
    standard risk analysis concepts modified to consider factors of
    financial and operational risk, as well as, customer risk/benefits.
    This multidimensional analysis is used to prioritize each project
    request and is particularly useful in times of volatile funding levels
    like those experienced over the past decade. DART is currently
    evaluating software which allows for modeling of the various future
    program requirements against differing future revenue streams to aid
    leadership team decisions going forward.
        Lessons learned from this experience include, but are not limited
    to: using consistent process and scoring systems; documentation of the
    method of data capture, storage and analysis of the data; and, analysis
    of assets from an overall subgroup perspective.
    MAP-21 SGR Policy Implementation
        Even before the enactment of MAP-21, which made SGR national
    transit policy, DART has worked side-by-side with the FTA and our
    transit industry partners to improve the understanding and practice of
    transit asset management. In its 2010 National State of Good Repair
    Assessment, the FTA found that more than 40 percent of bus assets and
    25 percent of rail transit assets were in marginal or poor condition.
    Additionally, there is an estimated backlog of $50 to $80 billion in
    deferred maintenance and replacement needs, of which the vast majority
    is rail related. This backlog continues to grow at a rate of
    approximately $3.5B annually.
        The enactment of MAP-21 places the requirement on transit agencies
    to prepare a Transit Asset Management Plan. Transit agency customers,
    policy makers, and public agencies are holding agency management
    accountable for performance and increasingly expect more business-like
    management practices. The magnitude of capital needs, performance
    expectations, and increased accountability requires transit agency
    managers to enhance their approach to asset management.
        To advance the practice of transit asset management, the FTA
    created the ``Asset Management Guide''. This guide provides a transit
    specific asset management framework for managing assets individually
    and as a portfolio of assets that comprise an integrated system. The
    guide provides flexible, yet targeted guidance to advance the practice
    and implementation of transit asset management.
        MAP-21 made SGR national policy and the FTA has sought comments
    from industry partners through the administrative rulemaking process.
    DART believes the Federal Government should allow the FTA to implement
    the policy as mandated by MAP-21, and allow the industry time to adjust
    to the new policies as implemented, prior to making any major policy
    revisions in a new surface transportation bill.
    The Need for a Core Capacity Program
        State of Good Repair. Capital investments are not always about
    system additions or expansions. DART has significantly increased light
    rail infrastructure over the past 10 years, we have also increased our
    SGR obligations to maintain and replace those assets. DART's current
    light rail system configuration merges all rail lines (Red, Blue,
    Orange, and Green) within Dallas' Central Business District. As a
    consequence of heavy use and growth of the light rail system since DART
    first began light rail operations in 1996, the track condition along
    this 1.25-mile long rail corridor has deteriorated more quickly than
    DART had previously anticipated.
        Coupled with the rapid growth of the light rail system and
    passenger loads reaching approximately 100,000 passengers per day, we
    have determined that to maintain a State of Good Repair, the rail in
    our downtown core will need to be replaced within the next 2 years,
    well ahead of what was previously thought to be its useful life. This
    project, which directly impacts the ongoing reliability of the existing
    network, will require an investment approaching $45 to $50 million, and
    funding has been provided within the FY2014 Budget and 20-Year
    Financial Plan.
        Core Capacity. While DART will continue to aggressively invest
    annually to ensure a SGR, we recognize the need for a program designed
    to provide congestion relief and help address capacity needs of a rail
    corridor. Let me be very clear, DART is a strong advocate for a
    federally funded core capacity program and very interested in
    preserving it as a part of the Capital Investment Program as authorized
    by MAP-21. DART has been developing a core capacity strategy that could
    be advanced through the FTA Capital Investment Program. This strategy
    develops a program of interrelated projects which will be critical to
    respond to continued high regional growth trends, demands for system
    accessibility, expansion of new rail corridors outside our Service
    Area, and the development of a privately funded high speed rail system
    between Dallas and Houston, which is anticipated to open in 2021.
        The DART Board of Directors is currently in the process of
    initiating a long-range (2040) system plan update to outline future
    capital programs in addition to the core capacity program of
    interrelated projects. This update will strive to meet future regional
    growth expectations. In order for our system to fully integrate and
    accommodate the expected passenger demand, DART will need to advance
    both a second light rail alignment in the Dallas central business
    district and extend many of its current station platforms along the Red
    and Blue lines to accommodate longer trains. These projects will
    increase the core capacity of our system and enable it to be more
    sustainable and flexible in the long-term. Both of these projects are
    typical of core capacity needs not only in Dallas but across the
    country. We need a strong Federal core capacity program to support our
    efforts.
        As our ridership continues to grow, we will be operating near or in
    excess of our physical capacity, and above a level that provides
    acceptable passenger comfort and convenience. Without significant
    capital investment to expand the core capacity of the system, it is
    likely that DART will be unable to address growing demands in a fashion
    suitable to our customers and stakeholders.
    Conclusion
        With the enactment of MAP-21 in 2012, the Federal Government
    identified the need for sound financial planning and asset management
    practices throughout the transit industry. The FTA estimated in its
    2010 National State of Good Repair Assessment that the Nation's transit
    systems have a state-of-good-repair backlog of almost $78 billion in
    deferred maintenance and replacement needs. DART has worked diligently
    with the FTA, other key transportation authorities, and the American
    Public Transportation Association to craft national guidelines for this
    Federal policy based substantially on the practices DART has employed
    since its inception in 1983. MAP-21 also created a specific ``State of
    Good Repair'' grant program to help fund this mandate. DART recommends
    the continuation and growth of the program in the next surface
    transportation authorization.
        Finally, DART supports any and all efforts made by the Federal
    Government to provide more stable funding to support national
    transportation programs. DART applauds the bipartisan leadership of the
    Senate Environment and Works Committee for its 6-year highway bill and
    we look forward to working with the Banking Committee as it develops
    its transit title in the next bill. Toward that end, we appreciate the
    leadership of Transportation Secretary Foxx in the proposed ``GROW
    America'' legislation and hope the Committee will give it
    consideration, as well as the recommendations of the American Public
    Transportation Association, as you draft the transit title. Stable,
    predictable, and dedicated transit funding is critical to DART
    services. The most relevant challenge to DART's financial approach has
    been the volatility in the predictability of future revenues. DART
    relies heavily on transit formula funds, which are used to purchase
    rail cars and buses, improve maintenance and passenger facilities, as
    well as rebuild vehicles, track, and signalization systems. These funds
    also put decision making in the hands of local officials, allowing for
    focused investment where it is needed most in order to maintain
    passenger safety and improve efficiency.
        In conclusion, Mr. Chairman, on behalf of the 3,700 employees at
    DART, I would like to thank you for the opportunity you have given me
    here today. I stand ready to answer any questions you or any of the
    other Members of the Subcommittee may have.
                  Additional Material Supplied for the Record
      STATEMENT SUBMITTED BY LEANNE P. REDDEN, ACTING EXECUTIVE DIRECTOR,
                   CHICAGO REGIONAL TRANSPORTATION AUTHORITY

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