[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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