Public Transportation: New Starts Program Is in a Period of
Transition (30-AUG-06, GAO-06-819).
The Safe, Accountable, Flexible, Efficient Transportation Equity
Act: A Legacy for Users (SAFETEA-LU) authorized about $7.9
billion in commitment authority, through fiscal year 2009, for
the Federal Transit Administration's (FTA) New Starts program,
which is used to select fixed guideway transit projects, such as
rail and trolley projects, and to award full funding grant
agreements (FFGAs). The New Starts program serves as an important
source of federal funding for the design and construction of
transit projects throughout the country. SAFETEA-LU requires GAO
to report each year on FTA's New Starts process. As such, GAO
examined (1) the number of projects that were evaluated, rated,
and proposed for FFGAs for the fiscal year 2007 evaluation cycle
and the proposed funding commitments for the fiscal year 2007
budget; (2) procedural changes that FTA proposed for the New
Starts program beginning with the fiscal year 2008 evaluation
cycle; and (3) changes SAFETEA-LU made to the New Starts program
and FTA's implementation of these changes. GAO reviewed New
Starts documents and interviewed FTA officials and project
sponsors, among other things, as part of its review. GAO is not
making recommendations in this report. In commenting on a draft
of this report, FTA provided technical clarifications, which we
incorporated as appropriate.
-------------------------Indexing Terms-------------------------
REPORTNUM: GAO-06-819
ACCNO: A59906
TITLE: Public Transportation: New Starts Program Is in a Period
of Transition
DATE: 08/30/2006
SUBJECT: Budget controllability
Budgeting
Federal aid for transportation
Federal grants
Mass transit funding
Program evaluation
Program management
Transportation
Policies and procedures
FTA New Starts Program
FTA Small Starts Program
FTA Very Small Starts Program
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GAO-06-819
* Results in Brief
* Background
* FTA Proposed Five New Projects for FFGAs and Requested $1.47
* FTA Proposed Nine Procedural Changes to the New Starts Progr
* SAFETEA-LU's Changes to the New Starts Program Include Ident
* FTA Has Started to Implement SAFETEA-LU Changes and Will Con
* Small Starts Program Is Intended to Offer a Streamlined Proc
* FTA Also Identified Possible Changes to the New Starts Progr
* Concluding Observations
* Agency Comments
* Appendix I: Scope and Methodology
* Appendix II: FTA's Proposed Changes to the New Starts Progra
* Order by Mail or Phone
Report to Congressional Committees
United States Government Accountability Office
GAO
August 2006
PUBLIC TRANSPORTATION
New Starts Program Is in a Period of Transition
GAO-06-819
Contents
Letter 1
Results in Brief 3
Background 5
FTA Proposed Five New Projects for FFGAs and Requested $1.47 Billion for
the New Starts Program in Fiscal Year 2007 10
FTA Proposed Nine Procedural Changes to the New Starts Program and Adopted
Four after Considering Comments from the Transit Community 16
SAFETEA-LU's Changes to the New Starts Program Include Identifying New
Evaluation Criteria to Establishing the Small Starts Program 21
Concluding Observations 34
Agency Comments 34
Appendix I Scope and Methodology 36
Appendix II FTA's Proposed Changes to the New Starts Program 38
Tables
Table 1: Comparison of the Fiscal Year 2006 and Fiscal Year 2007 Rating
Scales 12
Table 2: Projects Proposed for FFGAs and Other Funding, Fiscal Year 2007
13
Table 3: Procedural Changes Proposed by FTA 16
Table 4: Summary of Common Transit Community Concerns and FTA's Responses
to the New Starts Procedural Changes 19
Table 5: Comparison of SAFETEA-LU's and TEA-21's New Starts Provisions 22
Table 6: Comparison of Small Starts and New Starts Program Statutory
Requirements 26
Table 7: Changes to the New Starts Program Proposed by FTA and the Transit
Community's Response 38
Figures
Figure 1: New Starts Planning and Development Process 7
Figure 2: New Starts Project Evaluation Criteria 9
Figure 3: New Starts Projects in Final Design and Preliminary Engineering,
Fiscal Year 2007 11
Figure 4: Planned Uses of Administration's Proposed Fiscal Year 2007
Budget for New Starts 15
Figure 5: Time Line for Implementing SAFETEA-LU Changes to the New Starts
Program 25
Figure 6: FTA's "Option 1" for Revising the New Starts Evaluation and
Ratings Framework 30
Figure 7: FTA's "Option 2" for Revising the New Starts Evaluation and
Ratings Framework 31
Abbreviations
ANPRM Advanced Notice of Proposed Rulemaking
BRT bus rapid transit
DOT Department of Transportation
FD Final design
FEIS Final environmental impact statement
FFGA full funding grant agreement
FHWA Federal Highway Administration
FONSI Finding of no significant impact
FTA Federal Transit Administration
HOV High-occupancy vehicle
LPA locally preferred alternative
LRT light rail transit
MOS minimum operable segment
MPO Metropolitan Planning Organization
NEPA National Environmental Policy Act
NPRM Notice of Proposed Rulemaking
PDA Project development agreements
PE Preliminary engineering
PMP Project Management Plans
ROD Record of decision
ROW right-of-way
SAFETEA-LU Safe, Accountable, Flexible, Efficient Transportation Equity
Act: A Legacy for Users
TEA-21 Transportation Equity Act for the 21st Century
This is a work of the U.S. government and is not subject to copyright
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separately.
United States Government Accountability Office
Washington, DC 20548
August 30, 2006 August 30, 2006
The Honorable Richard C. Shelby Chairman The Honorable Paul S. Sarbanes
Ranking Minority Member Committee on Banking, Housing, and Urban Affairs
United States Senate The Honorable Richard C. Shelby Chairman The
Honorable Paul S. Sarbanes Ranking Minority Member Committee on Banking,
Housing, and Urban Affairs United States Senate
The Honorable Don Young Chairman The Honorable James L. Oberstar Ranking
Democratic Member Committee on Transportation and Infrastructure House of
Representatives The Honorable Don Young Chairman The Honorable James L.
Oberstar Ranking Democratic Member Committee on Transportation and
Infrastructure House of Representatives
A significant portion of the federal government's share of new capital
investment in mass transportation since the early 1970s has come through
the Federal Transit Administration's (FTA) New Starts program, which
awards full funding grant agreements (FFGAs) for fixed guideway projects,
including rail, bus rapid transit, and ferry systems across the country.1
An FFGA establishes the terms and conditions for federal participation in
a project, including the maximum amount of federal funds available for the
project, which by statute cannot exceed 80 percent of its net cost. Since
fiscal year 1998, the New Starts program has provided state and local
agencies with more than $10.4 billion to help design and construct transit
projects throughout the country.2 A significant portion of the federal
government's share of new capital investment in mass transportation since
the early 1970s has come through the Federal Transit Administration's
(FTA) New Starts program, which awards full funding grant agreements
(FFGAs) for fixed guideway projects, including rail, bus rapid transit,
and ferry systems across the country.1 An FFGA establishes the terms and
conditions for federal participation in a project, including the maximum
amount of federal funds available for the project, which by statute cannot
exceed 80 percent of its net cost. Since fiscal year 1998, the New Starts
program has provided state and local agencies with more than $10.4 billion
to help design and construct transit projects throughout the country.2
The Safe, Accountable, Flexible, Efficient Transportation Equity Act: A
Legacy for Users (SAFETEA-LU) authorized the New Starts program through
fiscal year 2009 and provided approximately $7.9 billion in commitment
authority3 from fiscal year 2005 through fiscal year 2009. The Safe,
Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for
Users (SAFETEA-LU) authorized the New Starts program through fiscal year
2009 and provided approximately $7.9 billion in commitment authority3 from
fiscal year 2005 through fiscal year 2009. Competition for New Starts
funds continues to grow: According to FTA, SAFETEA-LU identified over 300
projects as eligible to compete for New Starts funding, compared with 190
such projects identified by the previous authorization legislation, the
Transportation Equity Act for the 21st Century (TEA-21). For that reason,
SAFETEA-LU, like TEA-21, directs FTA to continue to prioritize projects
for funding by evaluating, rating, and recommending potential projects on
the basis of specific financial and project justification criteria
including mobility improvements, cost-effectiveness, environmental
benefits, and operating efficiencies. However, SAFETEA-LU made several
changes to the New Starts evaluation and rating process, including
identifying a new eligibility category for smaller fixed guideway projects
and establishing new evaluation criteria. FTA is currently implementing
these changes.
1Fixed guideway systems use and occupy a separate right-of-way for the
exclusive use of public transportation services. These systems include
fixed rail, exclusive lanes for buses and other high-occupancy vehicles,
and other systems.
2This is the amount appropriated through fiscal year 2006, according to
FTA.
3Commitment authority is the amount of funding Congress has authorized FTA
to commit to New Starts projects for a given period of time.
SAFETEA-LU also requires us to report each year on FTA's processes and
procedures for evaluating, rating, and recommending New Starts projects
for funding and on FTA's implementation of these processes and procedures.
This report discusses (1) the number of projects that were evaluated,
rated, and proposed for FFGAs for the fiscal year 2007 evaluation cycle4
and the proposed funding commitments for the fiscal year 2007 budget; (2)
procedural changes that FTA proposed for the New Starts program beginning
with the fiscal year 2008 evaluation cycle; and (3) changes SAFETEA-LU
made to the New Starts program and FTA's implementation of these changes.
To address these objectives, we reviewed SAFETEA-LU; FTA guidance and
regulations governing the New Starts program; and other relevant FTA
documents, including the annual New Starts report. We also interviewed FTA
officials, project sponsors from five projects in preliminary engineering
and final design that were rated in the fiscal year 2007 evaluation cycle,
and representatives from the American Public Transportation Association
and the New Starts Working Group.5 In addition, we reviewed comments to
FTA's docket on New Starts and Small Starts and the Advanced Notice of
Proposed Rulemaking (ANPRM) for Small Starts. Finally, we attended one of
FTA's three meetings with project sponsors-the New Starts/Small Starts
Seminar and Listening Sessions-in March 2006. We conducted our work from
February 2006 through August 2006 in accordance with generally accepted
government auditing standards. (See app. I for more information on our
scope and methodology.)
4The fiscal year 2007 evaluation cycle began in May 2005 with the issuance
of the New Starts reporting instructions. Applications were due in August
2005, and FTA evaluated the applications in the fall of 2005. The annual
report was published in February 2006 and included funding recommendations
for fiscal year 2007.
5The New Starts Working Group is an organization of New Starts project
sponsors, metropolitan planning organizations, and private industry
transit firms that advocate on behalf of the New Starts program and
specific projects.
Results in Brief
For the fiscal year 2007 evaluation cycle, FTA evaluated and rated 20
projects, proposed 5 projects for new FFGAs, and requested $1.47 billion
for the New Starts program. Of the 20 projects rated, 1 was rated as
"high," 17 were rated as "medium," and 2 were rated as "low." FTA
recommended 12 of the 20 projects for funding. Specifically, FTA
recommended 5 projects for new FFGAs and 2 projects with pending FFGAs.6
In addition, FTA identified 5 other projects that may be eligible for
funding outside of FFGAs. The administration's budget request of $1.47
billion for the New Starts program is about $200 million more than the
amount received last year. The majority of the $1.47 billion would be
allocated to projects with existing and pending FFGAs and projects
proposed for new FFGAs.
FTA proposed nine procedural changes for the New Starts program, beginning
with the fiscal year 2008 evaluation cycle that were generally intended to
improve the management of the New Starts process. These changes include
linking the New Starts and the National Environmental Policy Act (NEPA)
planning requirements and processes and capping New Starts funding when
projects enter the final design phase. As required by SAFETEA-LU, FTA
published these proposals in policy guidance and sought public input. A
total of 41 transit agencies, government entities, consultants,
associations, and organizations submitted written comments to FTA's docket
in response to the proposed procedural changes. Project sponsors and other
members of the transit community supported changes that they thought would
make the New Starts process more efficient, but many commenters expressed
strong opposition to other changes. For example, many commenters opposed
FTA's proposal that project sponsors analyze ridership and cost
uncertainties, citing concerns about the lack of guidance on how to
conduct the analysis as well as about the time and resources required to
perform such an analysis. FTA implemented four of the nine proposed
procedural changes and, on the basis of the comments received, did not
implement the other five changes. FTA, however, noted that it may revisit
these proposed changes in the future.
6Projects with pending FFGAs have been previously recommended for FFGAs by
FTA; however, the FFGAs have not been executed. FTA expects to execute
both pending FFGAs by the end of fiscal year 2006.
SAFETEA-LU introduced eight changes to the New Starts program, such as
establishing the Small Starts program and identifying new evaluation
criteria. FTA has taken some initial steps to implement these changes,
including issuing an ANPRM for the Small Starts program and guidance for
the New Starts program, both in January 2006. The Small Starts program is
a component of the New Starts program and is intended to offer an
expedited and streamlined application and review process for small
projects. The transit community, however, questioned whether the Small
Starts program, as outlined in the ANPRM, would provide such a process. In
July 2006, FTA simplified how Small Starts projects would be evaluated and
rated and introduced a new eligibility category within the Small Starts
program called Very Small Starts, which is for the least costly projects.7
Very Small Starts projects will qualify for an even simpler and more
expedited evaluation process. FTA's actions appear to have streamlined the
Small Starts program more than was originally proposed in the ANPRM. FTA
will have the opportunity to make additional modifications, as
appropriate, as it works to develop the final rule for the Small Starts
program over approximately the next 18 months. In its January 2006
guidance, FTA also identified and sought public input on possible changes
to the New Starts program that would have an impact on traditional New
Starts projects, such as revising the evaluation process to incorporate
the new evaluation criteria identified by SAFETEA-LU. According to FTA,
potential challenges in moving forward are incorporating both land use and
economic development as separate criteria in the evaluation process, as
required by the statute-including developing appropriate measures for
these criteria and avoiding duplication in counting benefits. We have also
previously reported similar challenges in measuring these types of
benefits and noted that experts have suggested potential solutions, such
as using qualitative information about the benefits rather than relying
strictly on quantitative information and expanding the use of risk
assessment or probability analysis in conjunction with economic analysis.8
Some of FTA's proposed changes to the New Starts process, which would
consider qualitative information about the project and the project's
uncertainties, appear to be in line with these suggestions.
7In July 2006, FTA issued final interim guidance that will govern the
Small Starts evaluation and rating process until the final rule is issued
in early 2008.
8GAO, Highway and Transit Investments, Options for Improving Information
on Projects' Benefits and Costs and Increasing Accountability for Results,
GAO-05-172 (Washington, D.C.: Jan. 24, 2005).
The Department of Transportation, including FTA, reviewed a draft of this
report. FTA officials provided technical clarifications, which we
incorporated as appropriate.
Background
SAFETEA-LU authorized a total of $45.3 billion for a variety of transit
programs, including financial assistance to states and localities to
develop, operate, and maintain transit systems from fiscal year 2005
through fiscal year 2009. Under one program, New Starts, FTA identifies
and selects fixed guideway transit projects for funding-including heavy,
light, and commuter rail; ferry; and certain bus projects (such as bus
rapid transit). The New Starts program serves as an important source of
federal funding for the design and construction of transit projects
throughout the country. FTA generally funds New Starts projects through
FFGAs, which establish the terms and conditions for federal participation
in a New Starts project and also define a project's scope, including the
length of the system and the number of stations; its schedule, including
the date when the system is expected to open for service; and its cost.
For a project to obtain an FFGA, it must progress through a local or
regional review of alternatives and meet a number of federal requirements,
including requirements for information used in the New Starts evaluation
and rating process (see fig. 1). As required by SAFETEA-LU, New Starts
projects must emerge from a regional, multimodal transportation planning
process. The first two phases of the New Starts process-systems planning
and alternatives analysis-address this requirement. The systems planning
phase identifies the transportation needs of a region, while the
alternatives analysis phase provides information on the benefits, costs,
and impacts of different corridor-level options, such as rail lines or bus
routes. The alternatives analysis phase results in the selection of a
locally preferred alternative-which is intended to be the New Starts
project that FTA evaluates for funding, as required by statute. After a
locally preferred alternative is selected, project sponsors submit a
request to FTA for entry into the preliminary engineering phase.9
Following completion of preliminary engineering and federal environmental
requirements, the project may be approved by FTA to advance into final
design,10 after which the project may be approved by FTA for an FFGA and
proceed to construction, as provided for in statute. FTA oversees grantee
management of projects from the preliminary engineering phase through
construction and evaluates the projects for advancement into each phase of
the process, as well as annually for the New Starts report to Congress.
9During the preliminary engineering phase, project sponsors refine the
design of the proposal, taking into consideration all reasonable design
alternatives and estimating their costs, benefits, and impact (e.g.,
financial or environmental). According to FTA officials, to gain approval
for entry into preliminary engineering, a project must (1) be identified
through the alternatives analysis process, (2) be included in the region's
long-term transportation plan, (3) meet the statutorily defined project
justification and financial criteria, and (4) demonstrate that the
sponsors have the technical capability to manage the project during
preliminary engineering. Some federal New Starts funding is available to
projects for preliminary engineering activities, if so appropriated by
Congress.
10Final design is the last phase of project development before
construction and may include right-of-way acquisition, utility relocation,
and the preparation of final construction plans and cost estimates.
Figure 1: New Starts Planning and Development Process
Legend:
LPA = locally preferred alternative MPO = Metropolitan Planning
Organization NEPA = National Environmental Policy Act PE = Preliminary
engineering PMP = Project Management Plans ROW = right-of-way
Note: NEPA requires federal agencies to prepare detailed statements
assessing the environmental impact of and alternatives to major federal
actions significantly affecting the environment. In the transportation
context, the NEPA evaluation measures the impact of different alternatives
by the extent to which the alternative meets the project purpose, need,
and consistency with the goals and objectives of any local urban planning.
To help inform administration and congressional decisions about which
projects should receive federal funds, FTA assigns ratings on the basis of
various financial and project justification criteria, and then assigns an
overall rating. For the fiscal year 2007 evaluation cycle, FTA primarily
used the financial and project justification criteria identified in
TEA-21.11 These criteria reflect a broad range of benefits and effects of
the proposed project, such as cost-effectiveness, as well as the ability
of the project sponsor to fund the project and finance the continued
operation of its transit system (see fig. 2). Projects are rated at
several points during the New Starts process-as part of the evaluation for
entry into preliminary engineering and final design, and yearly for
inclusion in the New Starts annual report.
11As will be discussed later in this report, SAFETEA-LU identified
additional criteria for FTA to use in its evaluation and rating process.
However, according to FTA's January 2006 proposed guidance, FTA does not
plan to change the current framework and methodology for evaluating and
rating New Starts projects before publishing the new final rule for its
New Starts program, which is expected in January 2008. However, FTA did
incorporate several SAFETEA-LU changes in the fiscal year 2007 evaluation
and rating process, including using a revised rating scale and downgrading
the emphasis placed on the federal share. These changes will be discussed
later in this report.
Figure 2: New Starts Project Evaluation Criteria
FTA assigns the proposed project a rating for each criterion and then
assigns a summary rating for local financial commitment and project
justification. Finally, FTA develops an overall project rating. The
exceptions to this process are statutorily "exempt" projects, which are
those with requests for less than $25 million in New Starts funding. These
projects do not have requirements for submitting project justification
information-although FTA encourages their sponsors to do so-do not receive
ratings from FTA and are not eligible for FFGAs; thus, the number of
projects in preliminary engineering or final design may be greater than
the number of projects evaluated and rated by FTA.
As required by statute, the administration uses the FTA evaluation and
rating process, along with the stage of development of New Starts
projects, to decide which projects to recommend to Congress for funding.12
Although many projects receive a summary rating that would make them
eligible for FFGAs, only a few are proposed for FFGAs in a given fiscal
year. FTA proposes projects for FFGAs when it believes that the projects
will be able to meet certain conditions during the fiscal year for which
funding is proposed. These conditions include the following:
12The administration's funding recommendations are made in the President's
budget and are included in FTA's annual New Starts report to Congress,
which is released each February in conjunction with the President's
budget.
o All non-New Starts funding must be committed and available for
the project.
o The project must be in the final design phase and have
progressed to the point where uncertainties about costs, benefits,
and impacts (e.g., environmental or financial) are minimized.
o The project must meet FTA's tests for readiness and technical
capacity, which confirm that there are no cost, project scope, or
local financial commitment issues remaining.
FTA Proposed Five New Projects for FFGAs and Requested $1.47
Billion for the New Starts Program in Fiscal Year 2007
FTA's Annual Report on New Starts: Proposed Allocations of Funds
for Fiscal Year 2007 (annual report) identified 24 projects in
preliminary engineering and final design (see fig. 3). FTA
evaluated and rated 20 of these projects,13 and 4 projects were
statutorily exempt from being rated because their sponsors
requested less than $25 million in New Starts funding.14 FTA
evaluated and rated fewer projects during the fiscal year 2007
cycle than in fiscal year 2006. According to FTA, this decrease
occurred because 12 proposed projects are no longer in preliminary
engineering or final design.15 FTA stated in its annual report
that the sponsors of these projects have either (1) fully
implemented the project; (2) received the total New Starts funding
requested to implement the project; (3) terminated or suspended
project development activities; (4) withdrawn from the New Starts
process while they address outstanding issues; or (5) decided not
to pursue New Starts funding.
FTA Proposed Five New Projects for FFGAs and Requested $1.47 Billion for the New
Starts Program in Fiscal Year 2007
13FTA does not evaluate and rate projects that already have FFGAs or that
are in alternatives analysis.
14Projects with requests for less than $25 million in New Starts funding
were not evaluated and rated during the fiscal year 2007 cycle; however,
these projects will be evaluated and rated as "Small Starts" once the
final rule for the Small Starts program is in place, as specified in
section 5309(e)(B) of SAFETEA-LU.
15These projects include Boston, Silver Line Phase III; El Paso, Starter
Line; Ft. Collins, Mason Transportation Corridor; Kansas City, Southtown
BRT; Las Vegas, Resort Corridor Downtown Monorail; Los Angeles, Exposition
Corridor; New Orleans, Desire Streetcar; Orange County, CenterLine LRT;
San Diego, Mid-Coast LRT; San Jose, Silicon Valley Rapid Transit Corridor;
South Wasilla, Track Realignment; and Tampa Bay, Regional Rail System.
Figure 3: New Starts Projects in Final Design and Preliminary Engineering,
Fiscal Year 2007
Of the 20 projects that were rated in the fiscal year 2007 evaluation
cycle, 1 was rated as "high," 17 were rated as "medium," and 2 were rated
as "low." Under TEA-21, during fiscal years 2000 through 2006, FTA
designated projects as highly recommended, recommended, or not
recommended, based on the results of FTA's evaluation of each of the
criteria for project justification and local financial commitment.
SAFETEA-LU replaced this rating scale with a 5-point scale of high,
medium-high, medium, medium-low, and low. To help transition to the new
rating scale, FTA used a 3-point scale of high, medium, and low for the
fiscal year 2007 evaluation cycle, but used the same decision rules to
determine overall project ratings as it did in previous years (see table
1). According to FTA officials, FTA intends to work closely with the
industry to implement the SAFETEA-LU provisions so that they can be
applied in subsequent annual project evaluation cycles. In addition, FTA's
current schedule anticipates that the final rule will be completed in time
to use the 5-point scale for the fiscal year 2010 evaluation cycle.
Table 1: Comparison of the Fiscal Year 2006 and Fiscal Year 2007 Rating
Scales
Fiscal year 2006 Fiscal year 2007
evaluation cycle rating evaluation cycle
Decision rule scale rating scale
At least "medium-high" for Highly recommended High
finance and project justification
At least "medium" for finance and Recommended Medium
project justification
Not rated at least "medium" for Not recommended Low
finance and project justification
Source: FTA's New Starts annual report.
FTA's evaluation process informed the administration's recommendation to
fund 12 projects. FTA recommended five projects for new FFGAs. The total
capital cost of these five projects is estimated to be $3.3 billion, of
which the total federal New Starts share is expected to be $1.9 billion.
In addition, FTA recommended funding for two projects with pending FFGAs.
The total capital cost of these two projects is estimated to be $8.2
billion, of which the total federal New Starts share is expected to be
$2.8 billion. FTA also recommended reserving $101.9 million in New Starts
funding for five "other projects." In its annual report, FTA stated that
four of the five other projects (1) were in or nearing final design, (2)
received overall medium or higher ratings, and (3) had medium or better
cost-effectiveness ratings, or (4) were exempt from the requirement to
achieve a medium cost-effectiveness rating.16 According to FTA, no other
project in preliminary engineering or final design met these criteria. The
fifth project-Washington, D.C., Largo Metrorail Extension-did not meet
these criteria but was congressionally designated for funding in
SAFETEA-LU.17 Similar to last year, FTA did not specify funding levels for
the five other projects because it wanted to ensure that the projects were
moving forward as anticipated before making specific funding
recommendations to Congress. FTA also notes in its annual report that some
projects may encounter unexpected obstacles that slow their progress. For
example, FTA stated that some of the projects must still complete the
environmental planning process and address FTA-identified concerns related
to capital costs or project scope. Reserving funds for these projects
without specifying a particular amount for any given project will allow
the administration to make "real time" funding recommendations when
Congress is making appropriations decisions. FTA does not expect that all
five other projects will be recommended for funding in fiscal year 2007.
(See table 2 for more information about the 12 projects recommended for
funding.)
16SAFETEA-LU exempted four projects from a requirement to have a medium
cost-effectiveness rating.
17SAFETEA-LU, section 3043(a) (31) and 3043(j).
Table 2: Projects Proposed for FFGAs and Other Funding, Fiscal Year 2007
Dollars in millionsa
New Starts
New Starts Total share of
project capital capital
Project name Location category cost cost
West Corridor LRT Denver, CO New FFGA $593.0 49%
South Corridor Portland, OR New FFGA 557.4 60
I-205/Portland Mall LRT
Wilsonville to Beaverton Washington New FFGA 117.3 50
Commuter Rail County, OR
Northwest/Southeast LRT Dallas, TX New FFGA 1,406.2 50
MOS
Weber County to Salt Lake Salt Lake New FFGA 611.7 80
City Commuter Rail City, UT
Long Island Rail Road East New York, NY Pending 7,779.3 34
Side Access FFGA
North Shore LRT Connector Pittsburgh, PA Pending 393.0 55
FFGA
Second Avenue Subway MOS New York, NY Other 4,947.8 26
Norfolk LRT Norfolk, VA Other 203.7 49
Dulles Corridor Metrorail Northern VA Other 1,840.1 50
Project - Extension to
Wiehle Avenue
University Link LRT Seattle, WA Other 1,720.0 41
Extension
Largo Metrorail Extension Washington, Other 433.87 60
D.C.
Source: GAO summary of information in the New Starts annual report.
Legend:
LRT = Light rail transit MOS = Minimum operable segment
aThe numbers included in this table are what was recommended by FTA in the
New Starts annual report but the actual total capital cost and percent of
New Starts share is subject to change at the time FTA executes the FFGA.
The administration's fiscal year 2007 budget proposal requests that $1.47
billion be made available for the New Starts program. This total includes
funding for 16 projects already under an FFGA. Figure 4 illustrates the
planned uses of the administration's proposed fiscal year 2007 budget for
New Starts, including the following:
o $571.9 million would be shared among the 16 projects with
existing FFGAs,
o $355 million would be shared between the 2 projects with
pending FFGAs,
o $302.6 million would be shared by the 5 projects proposed for
new FFGAs,
o $101.9 million would be shared by as many as 5 "other" projects
to continue their development, and
o $100 million would be used for new Small Starts projects.
Figure 4: Planned Uses of Administration's Proposed Fiscal Year
2007 Budget for New Starts
Note: FTA is authorized to use up to 1 percent of amounts made
available for the New Starts/Small Starts program for project
management oversight activities. SAFETEA-LU also authorized New
Starts funds to be set aside for each fiscal year from 2006
through 2009 for projects in Alaska and Hawaii, for fixed guideway
systems and extension projects utilizing ferry boats, ferry boat
terminals, or approaches to ferry boat terminals. Finally, FTA is
also authorized to provide $5 million for each fiscal year from
2006 through 2009 for the Denali Commission, which provides
critical utilities, infrastructure, and economic support
throughout Alaska, particularly in remote communities. According
to FTA, the Small Starts program, authorized in SAFETEA-LU, does
not go into effect until fiscal year 2007, and FTA had no projects
in the pipeline when this report was prepared.
FTA Proposed Nine Procedural Changes to the New Starts Program and
Adopted Four after Considering Comments from the Transit Community
In January 2006, FTA proposed nine procedural changes for the New
Starts program beginning with the fiscal year 2008 evaluation
cycle. These changes include linking the New Starts and NEPA
planning requirements and processes and capping New Starts funding
when projects enter the final design phase. FTA's guidance states
that these procedural changes are generally intended to improve
the management of the New Starts process and to ensure the
accuracy and consistency of the information submitted to the
agency as part of the New Starts evaluation and rating process.
According to FTA, these procedural changes do not alter the New
Starts evaluation and rating framework, and they are not subject
to the formal rule-making process. Table 3 summarizes the proposed
procedural changes and FTA's rationale for proposing these
changes.
FTA Proposed Nine Procedural Changes to the New Starts Program and Adopted Four
after Considering Comments from the Transit Community
Table 3: Procedural Changes Proposed by FTA
Proposed procedural
change Description FTA's rationale for change
NEPAa interfaces Sponsors must complete To mitigate conflicts
NEPA scoping before between NEPA and New Starts
preliminary engineering by fostering earlier
(PE). interaction and general
consensus among
participants about the
alternatives considered
during NEPA review.
NEPA interfaces Sponsors must present New To ensure the use and
Starts evaluation of disclosure of information
locally preferred for decision making.
alternative with NEPA
evaluation of
alternatives.
NEPA interfaces Sponsors must achieve an To minimize the need for
acceptable New Starts additional environmental
rating before the final reviews after a project's
environmental impact scope is changed to improve
statement (FEIS), record the New Starts ratings, and
of decision (ROD), or to ensure the public is
finding of no significant presented with accurate
impact (FONSI) is issued. information on projects
that are acceptable for New
Starts funding.
Preservation of Sponsors must document To ensure that information
information for the information produced is preserved and will be
before and after during the planning phase available to be analyzed in
studyb that will be needed for the before-and-after study
the before-and-after required by SAFETEA-LU.
study and update the
information and analysis
before entering final
design (FD).
Certification of Individuals must certify To ensure that local and
technical methods, the tools and techniques federal decision makers are
planning used in the analysis to provided with accurate
assumptions, and ensure that the information when evaluating
project development approaches have been New Starts projects.
procedures developed and applied
according to professional
standards and FTA
guidelines.
Analysis of Sponsors must analyze To respond to SAFETEA-LU's
ridership and cost uncertainties when emphasis on improving the
uncertainties developing ridership reliability of forecasts
forecasts and cost used in the evaluation
estimates. process.
Project development FTA will selectively To ensure that project
agreements require projects to sponsors advance through
establish a project phases of project
development agreement development, to focus
(PDA). project sponsors'
effort/FTA oversight on
principal issues, and to
provide basis for FTA
rescission of PE/FD
approval.
New Starts FFGA FFGA New Starts funding To ensure submission of
funding level set at amount will be capped reliable cost and ridership
final design once the project is forecasts for decision
approval approved for FD. making, to minimize cost
increases between stages of
development, and to clarify
FTA's participation in
project costs.
Mode-specific All sponsors will be To acknowledge and capture
constants allowed to represent the previously unmeasured
benefits from attributes of fixed
improvements in transit guideway projects in areas
service attributes, such considering new modes, to
as reliability, span of enhance consistent
service, and passenger treatment of projects
amenities, when nationally, and to improve
developing their the reliability of travel
projects. forecasts.
Source: GAO summary of the proposed changes and FTA's rationale for
proposing these changes.
aNEPA requires federal agencies to prepare detailed statements assessing
the environmental impact of and alternatives to major federal actions
significantly affecting the environment. In the transportation context,
the NEPA evaluation measures the impact of different alternatives by the
extent to which the alternative meets the project purpose, need, and
consistency with the goals and objectives of any local urban planning.
bA before and after study is similar to an outcome evaluation in that it
compares the forecasted benefits and costs of a project with the actual
benefits and costs of the project after the project is completed.
As we have previously recommended and SAFETEA-LU now requires, FTA
published its proposed procedural changes in policy guidance and sought
public comments on them.18 FTA obtained comments on its proposals by
asking sponsors to submit comments to the docket for up to 60 days. In
addition, FTA held three New Starts/Small Starts Seminar and Listening
Sessions ("listening sessions") across the country. The listening sessions
were intended to solicit comments from attendees on the implementation of
New Starts and Small Starts provisions of SAFETEA-LU, as well as to share
information about planning and project development activities for projects
seeking New Starts funding. FTA received 41 written comments in response
to these changes, including submissions from 33 transit agencies and
government entities and 8 consultants, associations, and organizations.
Most of the project sponsors and industry representatives we interviewed
told us that they appreciated FTA's efforts to obtain their input and to
encourage an open discussion about the proposed changes. Similarly, FTA
officials said that they were pleased with the volume of written comments
they received from the docket and the strong attendance at the three
listening sessions conducted in February and March 2006.
18GAO, Public Transportation: Opportunities Exist to Improve the
Communication and Transparency of Changes Made to the New Starts Program,
GAO-05-674 (Washington, D.C.: June 28, 2005). SAFETEA-LU requires that FTA
publish, for comment and response, policy guidance on the new fixed
guideway capital project review and evaluation process and criteria at the
following times: (1) 120 days after the enactment of SAFETEA-LU, (2) each
time significant changes are made to the process and criteria, and (3) at
least every 2 years.
Although the project sponsors and industry representatives were supportive
of some proposals that they thought would improve the New Starts program,
they also expressed a number of concerns about all of the changes. (See
table 4 for a summary of these concerns.) For example, the commenters were
generally supportive of FTA's proposal to require sponsors to keep and
update the information produced during alternatives analysis prior to each
phase of project development until the FFGA is awarded, since this
information is necessary for the before-and-after study. In contrast, most
project sponsors and transit industry groups opposed FTA's proposed
certification of technical methods, planning assumptions, and project
development procedures, citing concerns that such a certification would
raise questions about professional liability and lead to potential federal
prosecution, and noting that a single individual is typically not
responsible for producing all the underlying assumptions used to develop
cost estimates and ridership forecasts. On the basis of the comments
received, FTA adopted four proposals, including the mandatory completion
of NEPA scoping before entry into preliminary engineering (PE), the
presentation of the New Starts information in the NEPA documents, the
preservation of information for the before and after study, and the
capping of New Starts funds upon approval into final design. For two of
the four adopted proposals, FTA slightly revised its original proposals on
the basis of the comments received. FTA did not adopt five proposals;
however, FTA noted that it may revisit these proposed changes in the
future.
Table 4: Summary of Common Transit Community Concerns and FTA's Responses
to the New Starts Procedural Changes
Proposed procedural Common concerns expressed
change by the transit community FTA's response
NEPA interfaces o Increases time and Adopted.
(Sponsors must cost of project
complete NEPA scoping development
before preliminary o Makes it more
engineering.) difficult to achieve
local buy-in of the
planning process
NEPA interfaces o FTA is not using the Adopted. However, FTA
(Sponsors must present formal rule-making clarified that it will
New Starts evaluation process not develop a new
of locally preferred o Subjects FTA to rating for the NEPA
alternative with NEPA litigation document, but simply
evaluation of report on the project's
alternatives.) most recent rating.
NEPA interfaces o Recommended that FTA Not adopted. But if FTA
(Sponsors must achieve use the formal needs to issue a
an acceptable New rule-making process due supplemental document
Starts rating before to the extent of changes to reflect a scope
the final o Could escalate change required to
environmental impact project costs justify a "medium" or
statement (FEIS), o May jeopardize better rating, then a
record of decision nonfederal funding rating will not be
(ROD), or finding of issued until this
no significant impact document is completed.
(FONSI).) FTA will also describe
the impact that a New
Starts rating of less
than "medium" may have
on advancing projects.
Preservation of o The lack of guidance Adopted.
information for before on before and after
and after study study and data
collection methods
o FTA is not using the
formal rule-making
process
o Encourages FTA to
consider land use and
economic development in
analyses
Certification of o Technical information Not adopted. However,
technical methods, and key assumptions are FTA expanded the scope
planning assumptions, often generated by of technical procedures
and project multiple individuals or and assumptions covered
development procedures organizations, making it by existing Chief
difficult to assign Executive Officer
responsibility for certification.
certification
o No industry-accepted
standards to use for
certification
o May create liability
concerns for companies
and consultants
o Duplicates other FTA
reviews
Analysis of ridership o Increases time and Not adopted. FTA plans
and cost uncertainties cost of project to issue guidance
development clarifying the
o No guidance on information needed to
characterizing identify uncertainties,
uncertainties which will be subject
o No discussion of how to the notice and
uncertainties will be comment process.
addressed in
cost-effectiveness
measure
Project development o No criteria for when Not adopted. However,
agreements (PDA) PDAs will be used FTA will work with
o May increase time of sponsors who request
project development the use of a PDA, and
o PDAs will be used in this proposal may be
a punitive way revisited during the
o Process may be rule-making process.
duplicative of FTA's PE
and FD approval points
New Starts FFGA o No acknowledgment of Adopted. FTA will
funding level set at increased costs due to broaden the scope of PE
final design approval higher prices of activities and
materials or establish PE "exit
unforeseeable criteria," consider
circumstances requests for additional
o Negotiation of FFGA New Starts funding for
should be moved forward costs out of the
to coincide with FD sponsor's control, and
entry exempt projects in FD
o May inhibit from future New Starts
innovative contracting policy changes.
procedures (e.g., design
build)
o FTA is not using the
formal rule-making
process
Mode-specific o May be unnecessary Not adopted. FTA will
constants for areas with existing analyze options and may
data for different modes set values in the
o Unclear how values future, which will be
were developed subject to the Notice
o Experts need to be and Comment process.
involved in establishing
constants and guidance
Source: GAO summary of public comments and FTA's response to these
comments.
Note: The concerns summarized in this table reflect the comments submitted
by members of the transit community and do not necessarily reflect our
views or opinions.
More recently, FTA hired a consulting firm to conduct an assessment of the
New Starts project development process. According to FTA's Deputy
Administrator, the impetus for the review is to streamline the project
development process while still ensuring that projects recommended for
funding are delivered in a timely manner and stay within budget. We have
previously reported that project sponsors have raised concerns about the
number of changes FTA has made to the New Starts process, such as
requiring project sponsors to prepare risk assessments, and the time and
cost associated with implementing these changes.19 According to FTA, the
results of the review may help inform the development of the Notice of
Proposed Rulemaking (NPRM) for the New Starts program.
19 GAO-05-674 .
SAFETEA-LU's Changes to the New Starts Program Include Identifying New
Evaluation Criteria to Establishing the Small Starts Program
SAFETEA-LU made a number of changes to the New Starts program, including
establishing a new eligibility category, the Small Starts program, and
identifying new evaluation criteria. The Small Starts program is intended
to expedite and streamline the application and review process for small
projects, but the transit community has questioned whether FTA would
implement the program in a way that would do so. FTA has also proposed and
sought public input on the new evaluation criteria and other possible
changes to the New Starts program that would affect traditional New Starts
projects. In addition, FTA identified possible implementation challenges,
including how to distinguish between land use and economic development
criteria in the evaluation framework.
FTA Has Started to Implement SAFETEA-LU Changes and Will Continue to Do So
through the Rule-making Process
SAFETEA-LU introduced eight changes to the New Starts program, codified an
existing practice, and clarified federal funding requirements. The changes
include the creation of the Small Starts program and the introduction of
new evaluation criteria, such as economic development. In addition,
SAFETEA-LU codified FTA's requirement that project sponsors conduct before
and after studies for all completed projects. SAFETEA-LU also clarified
the federal share requirements for New Starts projects. Specifically,
SAFETEA-LU continues to require that the federal share for a New Starts
project may be up to 80 percent of the project's net capital project cost,
unless the project sponsor requests a lower amount, and prohibits the
Secretary of Transportation from requiring a nonfederal share of more than
20 percent of the project's total net capital cost. This language changes
FTA's policy of rating a project as low if it seeks a federal New Starts
share of more than 60 percent of the total cost. FTA had instituted this
policy beginning with the fiscal year 2004 evaluation cycle in response to
language contained in appropriation committee reports. Table 5 describes
SAFETEA-LU provisions for the New Starts program and compares them with
TEA-21's requirements.
Table 5: Comparison of SAFETEA-LU's and TEA-21's New Starts Provisions
Status of
Provisions SAFETEA-LU TEA-21 implementation
Establish the o Projects o Projects FTA issued the
Small Starts seeking less seeking less ANPRM in January
program than $25 than $25 2006 and interim
million in New million in New final guidance in
Starts funds Starts funding August 2006 for
will no longer were exempt the Small Starts
be exempt from from ratings program. By law,
the ratings process. exempt projects
process once o No separate will continue to
the Small program for be eligible for
Starts rule is small fixed funding without
finalized. guideway or being rated until
o Establishes nonfixed the final rule on
a new capital guideway Small Starts is
investment projects. issued.
program called
Small Starts
for projects
that (1) have a
total project
cost of less
than $250
million and (2)
are seeking
less than $75
million in
federal Small
Starts funding.
Codify the Project sponsors Not required FTA's May 2006
before-and-after with FFGAs must under TEA-21, but guidance requires
study requirement conduct a study FTA required, as that project
that (1) describes part of its sponsors document
and analyzes the December 2000 the information
impacts of the new Final Rule, produced during
fixed guideway project sponsors the planning phase
capital project on to conduct a that will be
transit services before and after needed for the
and transit study on before-and-after
ridership, (2) completed study and update
evaluates the projects. the information
consistency of and analysis
predicted and before entering
actual project FD.
characteristics
and performance,
and (3) identifies
sources of
differences
between predicted
and actual
outcomes. Project
sponsors must
prepare an
information
collection and
analysis plan,
which must be
approved prior to
execution of the
FFGA.
Revise New Starts Overall project Overall project FTA used a 3-point
overall project rating is based on rating was based scale for the
rating scale a 5-point scale of on 3-point scale: fiscal year 2007
"high," "highly evaluation, but
"medium-high," recommended," changed ratings to
"medium," "recommended," "high," "medium,"
"medium-low," and and "not and "low."
"low;" Projects recommended."
are required to
receive an overall
rating of "medium"
or higher to be
recommended for
funding.
Identify Requires Secretary Not required FTA identified
reliability of to analyze, under TEA-21. options for
cost estimate and evaluate, and incorporating
ridership forecast consider the reliability of
as a consideration reliability of the forecasts in the
in evaluation forecasting evaluation process
process methods used by and sought public
New Starts project input in its
sponsors and their January 2006
contractors to guidance.
estimate costs and
ridership.
Add economic Projects will be Not required FTA identified
development evaluated based on under TEA-21. options for
criterion to a review of their incorporating
evaluation process effects on local economic
economic development in the
development. evaluation process
and sought public
input in its
January 2006
guidance and ANPRM
for Small Starts.
Identify land use Projects will be Land use was not FTA identified
as a specific evaluated based on identified as an options for
evaluation a review of their evaluation incorporating land
criterion public criterion by use in the
transportation TEA-21. However, evaluation process
supportive land TEA-21 identified and sought public
use policies and land use as a input in its
future patterns. "consideration" January 2006
in the evaluation guidance and ANPRM
process, and FTA for Small Starts.
incorporated it
into the
evaluation
process.
Clarify nonfederal The Secretary is Federal share FTA implemented
financial not authorized to could not exceed this provision in
commitment require a 80 percent. But, its fiscal year
nonfederal in response to 2007 evaluation
financial language cycle.
commitment for a contained in
project that is appropriations
more than 20 committee
percent of its net reports, FTA
capital cost. instituted a
preference policy
favoring projects
that seek a
federal New
Starts share of
no more than 60
percent of the
total project
cost beginning
with the fiscal
year 2004
evaluation cycle.
Establish A higher share of No similar FTA's May 2006
incentives for New Starts funding provision in guidance requires
accurate cost and may be made TEA-21. that projects
ridership available to requesting entry
forecasts project sponsors into PE submit
if project's cost information on the
is not more than variables and
10 percent higher assumptions used
and ridership is to prepare
not less than 90 forecasts and the
percent of those parties
estimates when responsible for
project was developing the
approved for PE. different elements
of the forecasts.
This information
could potentially
be used to apply
the incentive
provision.
Require FTA to New Starts policy Not specifically FTA issued draft
publish policy guidance must be addressed in policy guidance in
guidance published for TEA-21. January 2006 and
notice and comment final guidance in
no later than 120 May 2006. FTA also
days after the issued draft
enactment of interim Small
SAFETEA-LU, each Starts guidance in
time significant June 2006 and
changes are made, final interim
and at least every guidance in July
2 years. 2006.
Assess The Secretary will Not required FTA's May 2006
contractors' submit an annual under TEA-21. guidance requires
performance report to that projects
congressional requesting entry
committees into PE submit
analyzing the information on the
consistency and variables and
accuracy of the assumptions used
cost and ridership to prepare
estimates made by forecasts and the
contractors to parties
public responsible for
transportation developing the
agencies different elements
developing new of the forecasts.
capital projects.
Source: GAO analysis of SAFETEA-LU and TEA-21.
FTA has taken some initial steps in implementing SAFETEA-LU changes. For
example, in January 2006, FTA published the proposed New Starts policy
guidance and, as will be discussed later in this report, the ANPRM for the
Small Starts program. In addition, in the final policy guidance published
in May 2006, FTA took steps to support its use of incentives for accurate
cost and ridership forecasts and assessing contractors' performance by
requiring that projects requesting entry into PE submit information on the
variables and assumptions used to prepare forecasts and the parties
responsible for developing the different elements of the forecasts. FTA
will continue to implement the changes outlined in SAFETEA-LU through the
rule-making process over the next 1 1/2 years. Specifically, in response
to SAFETEA-LU changes, FTA is developing the NPRM for the New Starts and
Small Starts programs. FTA plans to issue the NPRM in January 2007, with
the goal of implementing the final rule in January 2008. Figure 5 shows a
time line of FTA's actual and planned implementation of SAFETEA-LU
changes.
Figure 5: Time Line for Implementing SAFETEA-LU Changes to the New Starts
Program
Small Starts Program Is Intended to Offer a Streamlined Process, but Transit
Community Members Question Whether It Will Do So
The creation of the Small Starts program was a significant change made by
SAFETEA-LU. The Small Starts program is a discretionary grant program for
public transportation capital projects that (1) have a total cost of less
than $250 million and (2) are seeking less than $75 million in federal
Small Starts program funding. The Small Starts program is a component of
the existing New Starts program that, according to the conference reports
accompanying SAFETEA-LU, is intended to provide project sponsors with an
expedited and streamlined evaluation and ratings process. Table 6 compares
New Starts and Small Starts program statutory requirements.
Table 6: Comparison of Small Starts and New Starts Program Statutory
Requirements
Program
requirements Small Starts New Starts
Definition of Projects qualify as Small Projects qualify as New
eligibility Starts if less than $75 Starts if they are seeking
million in federal fixed $75 million or more in
guideway funding is sought, federal New Starts funding.
provided the total project
cost is also less than $250 Provides funding for new
million. fixed guideway systems and
extensions.
Provides funding for new
fixed guideway systems and
extensions, as well as
corridor-based bus capital
projects.
Project o Cost-effectiveness o Mobility improvements
justification o Public transportation o Environmental benefits
criteria supportive land-use o Operating efficiencies
policies o Cost-effectiveness
o Economic development o Public transportation
o Reliability of supportive land-use
forecasting policies
o Economic development
o Reliability of
forecasting
Local financial o Stability and o Stability and
commitment reliability of financial reliability of financial
criteria plan for capital costs plan for capital costs
o Stability and o Stability and
reliability of financial reliability of financial
plan for operating and plan for operating and
maintenance costs maintenance costs
o Level of non-Small o Level of non-New Starts
Starts funding funding
Project o Alternatives analysis o Alternatives analysis
development o Project development o Preliminary engineering
process o Construction o Final design
o Construction
Funding Project will use a Project Project requires a signed
instrument Construction Grant FFGA, which sets scope, cost,
Agreement. and schedule for the project,
as well as the maximum New
Starts share, source of other
funds, and schedule for
obligating funds.
Source: GAO analysis of FTA data.
In January 2006, FTA published an ANPRM to give interested parties an
opportunity to comment on the characteristics of and requirements for the
Small Starts program. In its ANPRM, FTA suggested that the planning and
project development process for proposed Small Starts projects could be
simplified by allowing analyses of fewer alternatives for small projects,
allowing the development of evaluation measures for mobility and
cost-effectiveness without the use of complicated travel demand modeling
procedures in some cases, and possibly defining some classes of
preapproved low-cost improvements as effective and cost-effective in
certain contexts. FTA also sought the transit community's input on three
key issues in its ANPRM, including eligibility, the rating and evaluation
process, and the project development process. For each of these issues,
FTA outlined different options for how to proceed and then posed questions
for public comment.
FTA's ANPRM for Small Starts generated a significant volume of public
comment. Members of the transit community were supportive of some
proposals for the Small Starts program, but also had a number of concerns.
In particular, the transit community questioned whether FTA's proposals
would, as intended, provide smaller projects with a more streamlined
evaluation and rating process. As a result, some commenters recommended
that FTA simplify some of its original proposals in the NPRM to reflect
the smaller scope of these projects. For example, several project sponsors
and industry representatives thought that FTA should redefine the baseline
alternative as the "no-build" option20 and make the before-and-after study
optional for Small Starts projects to limit the time and cost of their
development. In addition, others were concerned that FTA's proposals
minimized the importance of the new land use and economic development
evaluation criteria introduced by SAFETEA-LU, and they recommended that
the measures for land use and economic development be revised.
Since FTA does not plan to issue its final rule for the New Starts and
Small Starts programs until early 2008, FTA issued final interim guidance
for the Small Starts program in July 2006 to ensure that project sponsors
would have an opportunity to apply for Small Starts funding and proposed
projects could be evaluated in the upcoming cycle (i.e., the fiscal year
2008 evaluation cycle).21 The final interim guidance describes the process
that FTA plans to evaluate proposed Small Starts projects to support (1)
the decision to approve or disapprove their advancement to project
development and (2) decisions on project construction grant agreements,
including whether proposed projects are part of a broader strategy to
reduce congestion.22 In addition, FTA introduced a separate eligibility
category within the Small Starts program for "Very Small Starts" projects
in the final interim guidance. Small Starts projects that qualify as Very
Small Starts are projects that have all of the following elements:
20FTA requires that the benefits and costs of the proposed New Starts
project be assessed in comparison with a baseline alternative defined as
the best that can be done without building a new fixed guideway. The
purpose of the baseline alternative is to distill the benefits (and costs)
of the proposed New Starts project from the benefits that could be
achieved through low-cost improvements, such as route realignments and
increases in service frequency, that would not entail the significant cost
of a New Starts project's infrastructure. FTA defines the no-build
alternative in two ways: (1) an alternative that incorporates "planned"
improvements that are included in the fiscally constrained long-range plan
for which need, commitment, financing, and public and political support
are identified and are reasonably expected to be implemented or (2) an
alternative that adds only "committed" improvements together with minor
transit service expansions or adjustments that reflect a continuation of
existing service policies in newly developed areas.
o have substantial transit stations;
o include traffic signal priority and preemption, where
appropriate;
o provide low-floor vehicles or level boarding;
o include branding of the proposed service;
o offer 10 minute peak and 15 minute off-peak headways or better
while operating at least 14 hours per weekday;23
o are in corridors with existing riders who will benefit from the
proposed project and number more than 3,000 on an average weekday;
and
o have a total capital cost of less than $50 million (including
all project elements) and less than $3 million per mile (excluding
rolling stock).
According to the final interim guidance, FTA intends to scale the
planning and project development process to the size and
complexity of the proposed projects. Therefore, Very Small Starts
projects will undergo a very simple and streamlined evaluation and
rating process. For instance, according to the guidance, Very
Small Starts projects are cost-effective and produce land use and
economic development benefits commensurate with their costs; thus,
if a project meets the Very Small Starts eligibility criteria, it
will automatically receive "medium" ratings for land use and
cost-effectiveness. Small Starts projects that do not meet all of
the criteria for Very Small Starts projects will be evaluated and
rated using a framework similar to that used for traditional New
Starts projects, with the exception that fewer measures are
required and their development is simplified. In particular, FTA's
evaluation and rating process for Small Starts will diverge from
the traditional New Starts process in several ways. For example,
o the project's cost-effectiveness will be rated based on a
shorter time frame (i.e., opening year);
o other technically acceptable ridership forecasting procedures,
besides traditional "four-step" travel demand models can be used;
o the opening year's estimate of user benefits will be adjusted
upward when determining a project's cost-effectiveness;
o the financial and land use reporting requirements have been
simplified; and
o the project's economic development benefits and inclusion in a
congestion reduction strategy will be considered an "other factor"
in the evaluation process.
FTA Also Identified Possible Changes to the New Starts Program in
Response to SAFETEA-LU as Well as Implementation Challenges
In response to SAFETEA-LU, FTA identified possible changes to the
New Starts program that would affect traditional New Starts
projects in its January 2006 guidance. According to FTA, some
SAFETEA-LU provisions could lead to changes in the definition of
eligibility, the evaluation and rating process, and the project
development process. (See app. II for a description of the
different changes FTA is considering.) In the guidance, FTA
outlined changes it is considering and solicited public input,
through a series of questions, on the potential changes. For
example, FTA identified two options for revising the evaluation
and rating process to reflect SAFETEA-LU's changes to the
evaluation criteria. The first option would extend the current
process to include economic development impacts and the
reliability of cost and ridership forecasts. (See fig. 6.)
21Prior to the issuance of the final interim guidance, FTA issued proposed
interim guidance on the Small Starts program in June 2006 for review and
comment. FTA received comments from members of the transit community. A
concern expressed in the comments was that Very Small Starts projects
unfairly favored bus projects, due to the exclusion of fixed guideway as a
criterion for eligibility. Based on the comments received, FTA made
several changes to the final interim guidance, including eliminating the
requirement that Very Small Starts projects do not include the
construction of a new fixed guideway.
22FTA's emphasis on congestion relief reflects DOT's ongoing efforts to
reduce the nation's congestion. Specifically, in May 2006, DOT issued the
National Strategy to Reduce Congestion on America's Transportation
Network, which outlines a six-point plan for reducing congestion. To
implement this plan, DOT states that it will use discretionary resources,
potentially including Small Starts funds, to the maximum extent possible.
23This feature is not required for commuter rail or ferries.
FTA Also Identified Possible Changes to the New Starts Program in Response to
SAFETEA-LU as Well as Implementation Challenges
Figure 6: FTA's "Option 1" for Revising the New Starts Evaluation and
Ratings Framework
Specifically, FTA suggested that economic development impacts and the
reliability of forecasts simply be added to the list of criteria
considered in developing the project justification rating. The second
option would be to develop a broader process to include the evaluation
criteria identified by SAFETEA-LU and to organize the measures to support
a more analytical discussion of the project and its merits. (See fig. 7.)
According to FTA, the second option would broaden the evaluation process
beyond a computation of overall ratings based on individual evaluation
measures and develop better insights into the merit of a project than are
possible from using the quantified evaluation measures alone. In addition,
the second option would also consider the major uncertainties associated
with any of the information used to evaluate the project, such as
ridership forecasts, cost estimates, projected land use, and other
assumptions. According to FTA, understanding a project's uncertainties is
needed for informed decision making.
Figure 7: FTA's "Option 2" for Revising the New Starts Evaluation and
Ratings Framework
In its guidance, FTA also identified potential challenges in implementing
some SAFETEA-LU changes. In particular, FTA described the challenges of
incorporating and distinguishing between two measures of indirect
benefits24 in the New Starts evaluation process-land use and economic
development impacts.25 For example, FTA noted that its current land-use
measures (e.g., land-use plans and policies) indicate the
transit-friendliness of a project corridor both now and in the future, but
do not measure the benefits generated by the proposed project. Rather, the
measures describe the degree to which the project corridor provides an
environment in which the proposed project can succeed. According to FTA's
guidance, FTA's evaluation of land use does not include economic
development benefits because FTA has not been able to find reliable
methods of predicting these benefits. FTA further stated that because
SAFETEA-LU introduces a separate economic development criterion, the
potential role for land use as a measure of development benefits becomes
even less clear, given its potential overlap with the economic development
criterion. In addition, FTA noted that many economic development benefits
result from direct benefits (e.g., travel time savings), and therefore
including them in the evaluation could lead to double counting the
benefits FTA already measures and uses to evaluate projects. Furthermore,
FTA noted that some economic development impacts may represent transfers
between regions rather than a net benefit for the nation,26 raising
questions of whether these impacts are useful for a national comparison of
projects. To address some of the challenges, FTA suggested that an
appropriate strategy might be combining land use and economic development
into a single measure.
In our January 2005 report on the costs and benefits of highway and
transit investments, we identified many of the same challenges of
measuring and forecasting indirect benefits, such as economic development
and land-use impacts.27 For example, we noted that it is challenging to
predict changes in land use because current transportation demand models
are unable to predict the effect of a transportation investment on
land-use patterns and development, since these models use land-use
forecasts as inputs into the model. In addition, we noted that certain
benefits are often double counted when evaluating transportation projects.
In particular, indirect benefits, such as economic development, may be
more correctly considered transfers of direct user benefits or economic
activity from one area to another. Therefore, estimating and adding such
benefits to direct benefits could constitute double counting and lead to
overestimating a project's benefits. Despite these challenges, experts
told us that evaluating land use and economic development impacts is
important since they often drive local transportation investment
choices.28 To help overcome some of the challenges, experts suggested
several potential solutions, including using qualitative information about
the benefits rather than relying strictly on quantitative information and
expanding the use of risk assessment or probability analysis in
conjunction with economic analysis. For example, weather forecasters talk
about the probability of rain rather than suggesting that they can
accurately predict what will happen. This approach could illustrate that
projects with similar rates of return have very different risk profiles
and different probabilities of success. FTA's second option for revising
the New Starts evaluation process, which would consider qualitative
information about the project and the project's uncertainties, appear to
be in line with these suggestions.
24Direct benefits of transportation investments, such as lowered
transportation costs and improved access to goods and services, result in
individuals, households, and firms acting to take advantage of those
benefits. These actions can then lead to several types of indirect
benefits, such as increased property values and new development.
25SAFETEA-LU added economic development to the list of evaluation
criteria; it also identified land use as a specific evaluation criterion.
Under TEA-21, land use was not identified as an evaluation criterion, but
rather as a "consideration" in the evaluation process, and FTA
incorporated it into the evaluation process.
26Indirect benefits, such as economic development, may represent transfers
of economic activity from one area to another; and, while such a transfer
may represent real benefits for the jurisdiction making the transportation
investment, it is not a real economic benefit from a national perspective
because the economic activity is simply occurring in a different location.
27 GAO-05-172 .
FTA received a large number of written comments on its online docket in
response to its proposed changes. (See app. II for common comments
submitted for each proposed change.) While members of the transit
community were supportive of some proposals, they expressed concerns about
a number of FTA's proposed changes. For example, a number of commenters
expressed concerns about FTA's options for revising the evaluation
process, noting that both proposals deemphasized the importance of
economic development and land use. For example, as described in FTA's
January 2006 guidance, land use would receive less weight in calculating
the overall project rating in both proposals than it receives in the
current process. Some commenters also noted that land use and economic
development should not be combined into a single measure and that they
should receive the same weight as cost-effectiveness in the evaluation and
rating process. These commenters argued that combining land use and
economic development into a single measure or assigning them less weight
than cost-effectiveness serves to deemphasize these benefits.
28For our January 2005 report on the costs and benefits of highway and
transit investments, we contracted with the National Academy of Sciences
to convene a balanced, diverse panel of experts to discuss the use of
benefit-cost analysis in highway and transit decision making and gather
views about options to improve the information available to decision
makers. The experts selected for the panel were knowledgeable about
benefit-cost analysis, transportation policy and planning, highway and
transit use and transportation decision making. For more information about
our expert panel, see GAO-05-172.
Concluding Observations
FTA's New Starts program is in a period of transition. SAFETEA-LU made a
number of significant changes to the program, and FTA is off to a good
start in implementing these changes. Tough decisions and implementation
challenges remain, however. For example, FTA must determine how to
incorporate economic development into the evaluation process and implement
the Small Starts program in the upcoming evaluation cycle. Through the
issuance of the final interim guidance on the Small Starts program, FTA
has acted to provide a streamlined evaluation process for small projects
by simplifying the evaluation measures and introducing the Very Small
Starts eligibility category. As the Small Starts program is implemented in
the upcoming cycle, FTA officials will have the opportunity to determine
whether the Small Starts program is sufficiently streamlined and whether
the streamlined evaluation process provides adequate information to
differentiate among projects for funding purposes. FTA will also have the
opportunity to make necessary modifications to the Small Starts program as
it learns through its experience in implementing the program and working
to develop the final rule. Thus, the coming months will be a critical
period for the New Starts program, as FTA works through these remaining
decisions and implementation challenges to fully incorporate SAFETEA-LU
changes.
Agency Comments
We provided a draft of this report to the Department of Transportation,
including FTA, for review and comment. FTA officials provided technical
clarifications, which we incorporated as appropriate.
We are sending copies of this report to the congressional committees with
responsibilities for transit issues; the Secretary of Transportation; the
Administrator, Federal Transit Administration; and the Director, Office of
Management and Budget. We also will make copies available to others upon
request. In addition, this report will be available at no charge on GAO's
Web site at http://www.gao.gov .
If you or your staff have any questions on matters discussed in this
report, please contact me on (202) 512-2834 or at [email protected] .
Contact points for our Offices of Congressional Relations and Public
Affairs may be found on the last page of this report. Individuals making
key contributions to this report were Nikki Clowers, Assistant Director,
Vidhya Ananthakrishnan, and Daniel Hoy.
Katherine Siggerud Director, Physical Infrastructure
Appendix I: Scope and Methodology
To address our objectives, we reviewed the administration's fiscal year
2007 budget request, the Federal Transit Administration's (FTA) annual New
Starts report, FTA's New Starts policy guidance and Small Starts Advanced
Notice of Proposed Rulemaking (ANPRM), public comments received on FTA's
docket on New Starts and Small Starts, FTA's fiscal year 2008 reporting
instructions for the New Starts program, federal statutes pertaining to
the New Starts program, and previous GAO reports. We also interviewed FTA
officials and representatives from the American Public Transportation
Association and the New Starts Working Group. In addition, we attended
FTA's New Starts/Small Starts Seminar and Listening Session with project
sponsors in Washington, D.C., in March 2006.
We also conducted semistructured interviews with the sponsors of five
projects that were evaluated and rated in the fiscal year 2007 evaluation
cycle, including Raleigh, Regional Rail System; Dallas,
Northwest/Southeast Light Rail Transit MOS; Minneapolis, Northstar
Corridor Rail; Philadelphia, Schuylkill Valley Metrorail; and Seattle,
University Link Light Rail Transit Extension. We selected these projects
because they represent different phases of project development
(preliminary engineering and final design), received different overall
project justification and finance ratings, varied in size based on the
project's total capital cost, received different levels of New Starts
funding, and are geographically diverse. We obtained this information from
FTA's annual New Starts report for fiscal year 2007. Our interviews were
designed to gain project sponsors' perspectives on three main topics,
including the impact of FTA's proposed changes to the New Starts
application and project development process during the fiscal year 2008
evaluation cycle, FTA's implementation of the newly established Small
Starts program, and FTA's plans to align and revise its evaluation and
ratings process with the changes required by the Safe, Accountable,
Flexible, Efficient Transportation Equity Act: A Legacy for Users
(SAFETEA-LU). Specifically, we asked for their opinions on how FTA plans
to measure and weight new criteria in its evaluation framework. We
provided all project sponsors with a list of topics and questions prior to
our interviews, and we reviewed the comments they submitted to FTA's
docket. Because the five projects were selected as part of a
nonprobability sample, the results cannot be generalized to all projects.
In addition to our interviews, we analyzed the content of the comments
submitted to FTA's docket on the New Starts policy guidance and the Small
Starts ANPRM to systematically determine the project sponsors' views on
key issues and identify common themes in their responses to different
questions. We received from FTA a summary of all the written comments
submitted to the docket on both the Small Starts ANPRM and the New Starts
guidance on policies and procedures. These comments were organized by
topic. To verify the accuracy of the summaries, we checked 20 percent of
the comments against the original source documents.1 Two analysts reached
consensus on the coding of the responses, and a third analyst was
consulted in case of disagreement to ensure that our codes were reliable.
To ensure the reliability of the information presented in this report, we
interviewed FTA officials about FTA's policies and procedures for
compiling the New Starts annual reports, including FTA's data collection
and verification practices for New Starts information. Specifically, we
asked the officials whether their policies and procedures had changed
significantly since we reviewed them for our 2005 report on New Starts.2
FTA officials told us that there were no significant changes in their data
collection and verification policies and procedures for New Starts
information. Therefore, we concluded that the FTA information presented is
sufficiently reliable for the purposes of this report.
We conducted our work from February 2006 through August 2006 in accordance
with generally accepted auditing standards, including standards for data
reliability.
1All written comments are available at http://dms.dot.gov.
2 GAO-05-674.
Appendix II: FTA's Proposed Changes to the New Starts Program
In its January 2006 guidance, FTA identified possible long-term changes to
the New Starts program. According to FTA, some of these changes were
driven by SAFETEA-LU, while others were designed to improve the New Starts
program or correct past problems. Table 7 summarizes FTA's proposed
changes to the definition of eligibility, the evaluation and rating
process, and the project development process as well as FTA's rationale
for the proposed changes and the transit community's response to the
proposed changes.
Table 7: Changes to the New Starts Program Proposed by FTA and the Transit
Community's Response
FTA's rationale for Comments submitted by
Proposed change change the transit community
Definition of Eligibility
Definition of a fixed A fixed guideway has not o The current
guideway: FTA asks been specifically definition of fixed
whether a Bus Rapid defined in the statute. guideway works well;
Transit project is a thus, FTA should
"fixed guideway" project make no changes.
and whether FTA should o A minimum
fund high-occupancy percentage of the
vehicle (HOV) projects to guideway (e.g.,
the degree that they 30-75 percent)
provide benefits to should be dedicated
public transit riders. in order for a
project to get
funding.
o HOV projects
should be funded by
the Federal Highway
Administration
(FHWA).
Project evaluation and ratings process
Evaluation framework: FTA The current evaluation o Both proposed
proposes two options for framework can be options raise
revising the evaluation restructured to provide concerns because
framework. Option 1 would a more informative they continue to
extend the current analytical discussion of define
framework to include the project and its cost-effectiveness
economic development merits for New Starts only in terms of
impacts and the funding. mobility.
reliability of o Neither proposed
forecasting methods for option gives enough
costs and ridership. weight to land use
Option 2 would be a and economic
broader framework that development.
incorporates the new
evaluation factors
specified by SAFETEA-LU
and, according to FTA,
organizes the measures to
better describe the
merits of the project,
its effectiveness, and
its cost-effectiveness.
Nature of the problem or New Starts projects are Funding should be
opportunity evaluation intended to solve available for projects
measure: FTA asks (1) specific transportation seeking to shape
whether measures that problems, take advantage economic development or
represent the nature of of opportunities to to provide a solution
the problem or the improve transportation to mobility problems.
opportunity the proposed services, or support
projects are designed to economic development. In
address should be particular, it is
included in the important in evaluating
evaluation framework and projects to understand
(2) how FTA should what problem the project
evaluate or rate projects is intended to solve.
that address significant
transportation problems
compared with projects
that take advantage of
opportunities to improve
service.
Economic development SAFETEA-LU identified o Station area
impacts measure: FTA economic impacts as a development benefits
identifies two options new evaluation better isolate the
for characterizing criterion. effect of the
economic development transit project.
benefits: (1) regional There are too many
economic benefits and (2) other variables
station area development associated with
impacts. FTA sought regional economic
comment on whether there benefits.
was preference for either o FTA should use
option, as well as on how both regional and
to evaluate economic station area
development and land use economic benefits.
as distinct and separate o Land use and
measures. economic development
should be separate
measures and have as
much weight as
cost-effectiveness
o Differentiating
between land use and
economic development
is difficult.
Mobility benefits The measure of mobility o FTA should
measure: FTA proposes to benefits ought to continue to work
measure mobility by using capture the number of toward capturing
a combination of user travelers that will transportation
benefits per passenger benefit as well as the benefits to highway
mile and project magnitude of the users in a project
ridership. FTA also asked benefit. corridor.
whether other measures of o FTA should
mobility benefits could analyze the impact
be used. of nonhome-based
trips, trips
generated by special
events, and
automobile trips not
taken because of
enhanced pedestrian
activity established
in a project
corridor.
Mobility for transit o Since low-income An implementation
dependents measure: FTA populations and difficulty would be the
proposes to measure households without inconsistencies in
mobility for transit access to automobiles regional travel demand
dependents by the share depend critically on models-that is, some
of user benefits accruing the public models are based on
to the passenger in the transportation system income, others on
lowest income stratum, to provide basic automobile ownership,
compared with the mobility, access to and some on both.
regional share of the jobs, health care,
lowest income stratum. and other critical
FTA asked whether this services, projects
proposed measure would that improve transit
cause any implementation services for these
difficulties and whether populations have
there were other measures special merit.
FTA should consider. o FTA's previous
measure-percentage of
low-income households
in the project
corridor-did not
measure whether
low-income riders
actually used the
system.
Environmental benefits No other measures have FTA should retain its
measure: FTA proposes to been identified. current measure of
continue using the same environmental benefits.
environmental benefits
measure, which uses the
projected change in
regional vehicle miles
traveled, to estimate the
change in various harmful
types of vehicle
emissions and energy
consumption.
Operating efficiency The current FTA should use the
measure: FTA proposes measure-projected cost-effectiveness
removing this measure as systemwide change in evaluation measure to
a separate evaluation operating cost per address the operating
criterion, relying passenger mile-does not efficiency criterion.
instead on an evaluation distinguish among
of cost-effectiveness to proposed projects, while
address the statutory the projected operating
criterion. According to cost of the system is a
FTA, the impact of the key component in
project on operating and calculating
maintenance costs is cost-effectiveness.
captured in the
calculation of
cost-effectiveness.
Cost-effectiveness The current measure o Broadening the
measure: FTA proposes to reflects breakpoints cost-effectiveness
broaden the current that anticipate measure would
cost-effectiveness nontransportation increase the time
measure to include benefits, but this is and cost of project
nontransportation not readily apparent to development.
benefits, such as the industry or o FTA should use
economic development decisionmakers. the consumer price
benefits, land use index, not the gross
impacts, and mobility domestic product
benefits to transit price index, to
dependents. FTA also adjust the dollar
suggests using two value of the
cost-effectiveness cost-effectiveness
measures-one for the threshold.
forecast year as is done
today and the second
calculated for the year
the project opens.
Financial capabilities SAFETEA-LU identifies o It is unclear
measure: FTA proposes the following factors from the guidance
changing the way the that FTA must use in who is responsible
financial rating factors evaluating financial for assessing the
related to uncertainty capability: (1) the reliability of
are incorporated into the reliability of financial forecasts.
evaluation process. forecasting methods for o The emphasis
Specifically, FTA costs and ridership, (2) placed on the
suggests using the existing grant reliability of the
project sponsor's ability commitments, (3) the financial forecast
to absorb funding degree to which funding should correlate to
shortfalls and cost sources are dedicated, the stage of project
overruns as an explicit (4) debt obligations of development.
measure of financial the project sponsor, and
risk. (5) the non-New Starts
funding share.
Reliability of forecasts SAFETEA-LU requires that o Proposal is
measures: FTA proposes to the reliability of the confusing.
assess the risk and forecasting methods used o Recent experience
uncertainty inherent in to estimate costs be with risk
project evaluation. considered in the assessments suggests
Specifically, FTA plans evaluation of New Starts that the proposal
to evaluate the projects. The would require
uncertainty associated reliability factor is a substantial effort
with the nature and way of assessing the with little
severity of the problem, likelihood the cost and reduction in
as well as individual ridership projections uncertainty.
measures of project merit will be achieved. o FTA should place
and cost-effectiveness significant weight
measures. on the project
sponsor's ability to
enhance the
reliability of
forecasts through
the proven quality
control methods.
Development of project SAFETEA-LU requires that Economic development
ratings: Currently, FTA the reliability of the and land use should
develops separate ratings forecasting methods used receive the same weight
for project justification to estimate costs be as cost-effectiveness.
and local financial considered in the
commitment, and then evaluation of New Starts
derives an overall projects.
project rating from these
component ratings using
decision rules. FTA
proposes to use a similar
process for rating
projects. However,
SAFETEA-LU requires that
the reliability of
forecasts be incorporated
into the ratings process
and FTA suggests
different options for
accomplishing this, such
as using probability
weightings or using
uncertainty indicators to
decide the outcome for
ratings at the margins.
FTA also seeks input
about the weights that
should be assigned to
each measure.
Comments submitted
FTA's rationale for by the transit
Proposed change change community
Project development process
Local endorsement of the o SAFETEA-LU o Securing an
financial plan: FTA proposes requires that FTA endorsement will
to require that project ensure that be overly
sponsors specify all proposed proposed New Starts burdensome and
sources of funding in the projects are delay project
financial plan, and that the supported by an development.
sponsoring agency provide a acceptable degree o FTA should not
letter endorsing the proposed of local financial dictate when
financial strategies and commitment and project sponsors
amounts of planned funding by resources. receive financial
those agencies identified as o FTA has commitments.
funding sources. experienced o It is hard to
situations in which fully secure
a project's funding
financial plans commitments in
state that local preliminary
agencies will engineering (PE)
provide funding, and final design
but in reality (FD).
those local
agencies do not
support the project
plan.
Approval of the baseline There has been o More clarity
alternative: FTA proposes to significant confusion is needed on how
maintain the current approval over the definition of FTA defines
process and definition of the the baseline baseline
baseline alternative. However, alternative. alternative.
FTA asks whether the baseline o Selection of
can be more clearly defined baseline
and whether there is a way to alternative
report on the benefits of the should not be
project, including the driven by FTA.
benefits attributable to the
difference between the
no-build and the baseline
alternatives.
On-board transit survey: FTA Data on current o Surveys are
is considering requiring that ridership patterns are expensive and may
a recent survey of transit essential to the be unnecessary in
riders be used to inform the development of some areas.
travel-forecasting procedures reliable forecasts. o FTA should
used during alternatives consider other
analysis. FTA suggests that means of
"recent" could be defined as collecting data
within the 5 years preceding a on ridership,
request to enter PE. such as
electronic fare
collection data
and small sample
surveys.
Preliminary engineering FD is intended to be o A clearer
purpose and exit criteria: FTA used to develop definition of the
is considering defining the PE documents for PE phase is
phase as the process of construction. As such, needed to help
finalizing the project's all issues related to project sponsors
scope, cost, and financial significant scope and target resources.
plan such that (1) all cost should be o Design costs
environmental impacts are resolved in PE. will be
identified and adequate frontloaded,
provisions are made for their thereby
mitigation in accordance with increasing the
the National Environmental costs of PE.
Policy Act, (2) all major or
critical project elements are
designed to the level that no
significant unknown impacts
relative to their costs will
result, and (3) all cost
estimating is complete to a
level of confidence necessary
for the sponsor to implement
the financing strategy.
Comments submitted
FTA's rationale for by the transit
Proposed change change community
Project reaffirmation by the Before a project is o Creates
metropolitan planning approved for another step that
organization (MPO): FTA is advancement into PE, will increase the
considering requiring that the the project must be time and cost of
sponsoring agencies reaffirm adopted by the MPO project
their adoption of the project, into its long-range development.
in its final configuration and transportation plan. o Duplicates
costs, in the MPO's long-range However, a project's sponsoring
transportation plan as part of scope and costs may agencies' ongoing
the application to advance the change during the PE work with the MPO
project to FD. phase. Thus, this and provides no
requirement would added certainty.
ensure that a revised o Will likely
project still conforms have limited
to the MPO's impact on local
transportation plans financial
and financial endorsement.
constraint o Inconsistent
requirements. with FHWA
regulations.
New Starts funding share SAFETEA-LU allows the o Incentive
incentives: FTA asks how it Secretary to provide a money should be
should implement the provision higher grant invested back
in SAFETEA-LU that would give percentage than into the New
FTA discretion to provide a requested by the Starts program.
higher percentage of New project sponsor if (1) o Incentive
Starts funding than that the net cost of the should focus on
requested by the project project is not more the project's
sponsor as an incentive to than 10 percent higher outcomes like
produce reliable ridership and than the net cost project impacts.
cost estimates. estimated at the time
the project was
approved for
advancement into PE,
and (2) the ridership
estimated for the
project is not less
than 90 percent of the
ridership estimated
for the project at the
time the project was
approved for
advancement into PE.
Source: GAO analysis of FTA guidance and public comments posted on FTA's
docket.
(542086)
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www.gao.gov/cgi-bin/getrpt? GAO-06-819 .
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Highlights of GAO-06-819 , a report to congressional committees
August 2006
PUBLIC TRANSPORTATION
New Starts Program Is in a Period of Transition
The Safe, Accountable, Flexible, Efficient Transportation Equity Act: A
Legacy for Users (SAFETEA-LU) authorized about $7.9 billion in commitment
authority, through fiscal year 2009, for the Federal Transit
Administration's (FTA) New Starts program, which is used to select fixed
guideway transit projects, such as rail and trolley projects, and to award
full funding grant agreements (FFGAs). The New Starts program serves as an
important source of federal funding for the design and construction of
transit projects throughout the country.
SAFETEA-LU requires GAO to report each year on FTA's New Starts process.
As such, GAO examined (1) the number of projects that were evaluated,
rated, and proposed for FFGAs for the fiscal year 2007 evaluation cycle
and the proposed funding commitments for the fiscal year 2007 budget; (2)
procedural changes that FTA proposed for the New Starts program beginning
with the fiscal year 2008 evaluation cycle; and (3) changes SAFETEA-LU
made to the New Starts program and FTA's implementation of these changes.
GAO reviewed New Starts documents and interviewed FTA officials and
project sponsors, among other things, as part of its review. GAO is not
making recommendations in this report. In commenting on a draft of this
report, FTA provided technical clarifications, which we incorporated as
appropriate.
For the fiscal year 2007 evaluation cycle, FTA evaluated and rated 20
projects, recommended 5 projects for new FFGAs and 2 projects with pending
FFGAs. FTA also identified 5 other projects that may be eligible for
funding outside of FFGAs. The administration's fiscal year 2007 budget
proposal requests $1.47 billion for the New Starts program, which is about
$200 million more than the amount received last year.
FTA proposed nine procedural, or nonregulatory, changes for the New Starts
program beginning with the fiscal year 2008 evaluation cycle that were
generally intended to improve the management of the New Starts process.
These changes include linking the New Starts and National Environmental
Policy Act planning requirements and processes and capping New Starts
funding when projects enter the final design phase. As required by
SAFETEA-LU, FTA published these proposals in policy guidance and sought
public input. Members of the transit community supported changes that they
thought would make the New Starts process more efficient, but many
commenters expressed strong opposition to other changes, citing, for
example, the time and resources required to analyze ridership and cost
uncertainties. Consequently, FTA implemented only 4 of the proposed
procedural changes, but indicated that a final decision on the other 5
proposed changes would be made through the rulemaking process.
SAFETEA-LU introduced eight statutory changes to the New Starts program
that include establishing the Small Starts program and identifying new
evaluation criteria. FTA has taken some initial steps to implement these
changes, including issuing an Advanced Notice of Proposed Rulemaking
(ANPRM) for the Small Starts program and proposed policy guidance for the
New Starts program, both in January 2006. The Small Starts program is a
new component of the New Starts program and is intended to offer an
expedited and streamlined application and review process for small
projects. The transit community, however, questioned whether the Small
Starts program, as outlined in the ANPRM, would provide such a process. In
July 2006, FTA introduced a new eligibility category called Very Small
Starts, which is for the simplest and least costly projects. Very Small
Starts projects will qualify for an even simpler and more expedited
evaluation process. FTA also identified and sought public input on
possible changes to the New Starts program that would have an impact on
traditional New Starts projects, such as revising the evaluation process
to incorporate the new evaluation criteria identified by SAFETEA-LU.
According to FTA, a potential challenge in moving forward is incorporating
both land use and economic development as separate criteria in the
evaluation process, including developing appropriate measures for the
criteria and avoiding duplication in counting benefits.
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