Public Transportation: Preliminary Information on FTA's
Implementation of SAFETEA-LU Changes (27-JUN-06, GAO-06-910T).
The Safe, Accountable, Flexible, Efficient Transportation Equity
Act: A Legacy for Users (SAFETEA-LU) authorized a significant
level of investment--over $52 billion--for federal transit
programs. SAFETEA-LU also added new transit programs and made
changes to existing programs, including the New Starts and Job
Access and Reverse Commute (JARC) programs. The New Starts
program is a discretionary grant program for public
transportation capital projects. The JARC program is intended to
improve the mobility of low-income individuals seeking work.
SAFETEA-LU authorized $8.6 billion for these two programs. The
Federal Transit Administration (FTA) manages both of these
programs. This testimony discusses GAO's preliminary findings on
the (1) changes SAFETEA-LU made to the New Starts program, (2)
changes SAFETEA-LU made to the JARC program, and (3) issues that
may be important as FTA moves forward with implementing the act.
To address these objectives, GAO interviewed FTA officials,
sponsors of New Starts projects, and representatives from
industry associations and reviewed FTA's guidance on the New
Starts and JARC programs and federal statutes, among other
things.
-------------------------Indexing Terms-------------------------
REPORTNUM: GAO-06-910T
ACCNO: A56007
TITLE: Public Transportation: Preliminary Information on FTA's
Implementation of SAFETEA-LU Changes
DATE: 06/27/2006
SUBJECT: Evaluation criteria
Federal aid for transportation
Program evaluation
Transportation
Program management
DOT Job Access and Reverse Commute
Program
FTA New Starts Program
******************************************************************
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GAO-06-910T
* Background
* SAFETEA-LU's Changes to the New Starts Program Range from Id
* 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
* SAFETEA-LU Transformed the JARC Program from a Discretionary
* SAFETEA-LU Created a Formula for Distributing JARC Funds and
* FTA Has Developed Interim JARC Guidance and Plans to Issue F
* Transparency, Communication, and Accountability Issues Will
* Contact Information
* Appendix I: FTA's Proposed Changes to the New Starts Program
* Related GAO Products
* New Starts reports and testimonies
* JARC reports and testimonies
* Other transit-related reports
* Order by Mail or Phone
Testimony
Before the Subcommittee on Housing and Transportation, Committee on
Banking, Housing, and Urban Affairs, U.S. Senate
United States Government Accountability Office
GAO
For Release on Delivery Expected at 2:30 p.m. EDT
Tuesday, June 27, 2006
PUBLIC TRANSPORTATION
Preliminary Information on FTA's Implementation of SAFETEA-LU Changes
Statement of Katherine Siggerud Physical Infrastructure
GAO-06-910T
Mr. Chairman and Members of the Subcommittee:
We appreciate the opportunity to provide testimony on the Federal Transit
Administration's (FTA) implementation of the Safe, Accountable, Flexible,
Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU). As
you know, SAFETEA-LU authorized a significant level of investment-over $52
billion-for federal transit programs. This authorization provides funding
for fiscal years 2004 through 2009, adds new transit programs, and makes
changes to existing programs, including the New Starts and Job Access and
Reverse Commute (JARC) programs. The New Starts program provides much of
the federal government's share of new fixed-guideway investments. Through
the New Starts program, FTA identifies and selects new fixed-guideway
transit projects for funding-including heavy, light, and commuter rail;
ferry; and certain bus projects. The JARC program is intended to assist
low-income individuals in accessing employment opportunities by attempting
to fill gaps in public transportation services.
My testimony today examines the (1) changes SAFETEA-LU made to the New
Starts program, (2) changes SAFETEA-LU made to the JARC program, and (3)
issues that may be important as FTA moves forward with implementing the
act. My comments are based on our ongoing work for the Senate Committee on
Banking, Housing, and Urban Affairs and the House Committee on
Transportation and Infrastructure as well as our body of work on the New
Starts and JARC programs.1 We will complete our ongoing work and report in
full to the Committees later this year. For our ongoing work, we
interviewed FTA officials, sponsors of New Starts projects, a metropolitan
planning organization, and representatives from industry associations. We
also reviewed FTA's guidance on the New Starts and JARC programs, the
Advanced Notice of Proposed Rule Making (ANPRM) for the new capital
investment program for Small Starts-a subcategory of new fixed guideway
projects-and the public comments submitted to FTA's docket on these
documents. We also reviewed the provisions of SAFETEA-LU and of its
predecessor, the Transportation Equity Act for the 21st Century (TEA-21),
dealing with the New Starts and JARC programs, and attended FTA's New
Starts/Small Starts Seminar and Listening Sessions in March and June 2006.
We conducted our work from February 2006 through June 2006 in accordance
with generally accepted government auditing standards.
1TEA-21 required GAO to evaluate both the New Starts evaluation and rating
process and the JARC program on a regular basis. SAFETEA-LU continued
similar requirements. In particular, we are required to review the New
Starts evaluation and rating process each year and the JARC program
beginning 1 year after the enactment of SAFETEA-LU and every 2 years
thereafter. See the Related GAO Products at the end of this testimony for
a listing of previous reports on these programs.
In summary:
o The eight changes SAFETEA-LU made to the New Starts program
range from establishing the Small Starts program to 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 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 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, or large
starts, such as revising the evaluation process to incorporate the
new criteria identified by SAFETEA-LU. According to FTA, a
potential challenge in moving forward is incorporating both land
use and economic development criteria into the evaluation process,
including developing appropriate measures for the criteria and
avoiding duplication in counting benefits. To address this issue,
FTA suggested combining land use and economic development into a
single measure. However, in the comments submitted to FTA, members
of the transit community repeatedly stated 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.
o SAFETEA-LU made a number of changes to the JARC program. One
key change was to change JARC from a discretionary to a
formula-based program. Whereas funds for JARC projects were
congressionally designated in recent years, SAFETEA-LU's formula
distributes funds to states and large urbanized areas.2 This will
significantly change the allocation of JARC funds as some states
and urbanized areas receive more funds than under the
discretionary program, others receive less, and some areas will
receive funds that had not received JARC funds in the past. Other
key changes resulting from SAFETEA-LU include allowing JARC
recipients to use a portion of funds for planning activities and
removing a limit on the amount of funds available for reverse
commute projects. To implement these changes, FTA began soliciting
comments and input through public listening sessions and program
notices in November 2005. FTA has released interim guidance for
fiscal year 2006, is currently developing draft final guidance for
the JARC program, and plans to issue final guidance later this
year. Potential challenges that FTA faces in moving forward
include issuing guidance in a timely manner so that recipients can
implement JARC programs, and determining how to incorporate JARC
recipients into FTA's oversight processes.
o Our past work suggests that transparency, communication, and
accountability issues will be important as FTA moves forward in
implementing SAFETEA-LU changes to the New Starts and JARC
programs. Since 1998, we have issued numerous reports on these
programs, and many of the reports contained recommendations to FTA
on ways to improve the programs' implementation. For example, we
have reported that FTA could increase the transparency of the New
Starts program by obtaining public input on proposed policy
changes before they are implemented. We have also reported that
FTA could better measure the outcomes of the JARC program-an
important step in holding the program accountable for results.
SAFETEA-LU addressed some of these issues, and FTA has also taken
steps to resolve some of them. For example, SAFETEA-LU requires
FTA to publish for notice and comment any proposals that make
significant changes to the New Starts program, which FTA did in
January 2006. Members of the transit community and FTA officials
have stated that they have been pleased with the review and
comment process. Nevertheless, given the number of changes that
are being made to both programs, continued focus on efforts to
improve transparency, communication, and accountability will be
important.
SAFETEA-LU authorized over $52 billion for federal transit
programs, including the New Starts and JARC programs, from fiscal
year 2005 through fiscal year 2009. SAFETEA-LU authorized $7.9
billion for the New Starts program and $727 million for the JARC
program. Both of these programs are managed by FTA.
The New Starts program is a discretionary grant program for
investments in new fixed-guideway projects. Under the
statutorily-defined evaluation process for the New Starts program,
FTA identifies and selects fixed-guideway transit
projects-including heavy, light, and commuter rail; ferry; and
busway projects-for funding. FTA generally funds New Starts
projects through full funding grant agreements (FFGA), 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; the project's
schedule, including the date when the system is expected to open
for service; and the project's cost. To obtain an FFGA, a project
must progress through a local or regional review of alternatives
and meet a number of federal requirements, including providing
information for the New Starts evaluation and rating process. 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, as
required by statute. After a locally preferred alternative is
selected, project sponsors seek FTA's approval for entry into the
preliminary engineering phase.3 Following completion of
preliminary engineering and federal environmental requirements-and
assuming New Starts requirements continue to be met-FTA may
approve the project's advancement into final design,4 after which
FTA may approve the project for an FFGA and proceed to
construction, as provided for in statute. FTA oversees grantees'
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.
To help inform administration and congressional decisions about
which projects should receive federal funds, FTA assigns ratings
based on a variety of financial and project justification
criteria, and then assigns an overall rating. For the fiscal year
2007 evaluation cycle, FTA used the financial and project
justification criteria identified in TEA-21.5 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. 1). FTA assigns the
proposed project a rating for each criterion, then assigns a
summary rating for local financial commitment and project
justification. Finally, FTA develops an overall project rating.
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 that is submitted to Congress.
2For this testimony, the term "states" includes the District of Columbia,
American Samoa, Guam, the Northern Marianas, Puerto Rico, and the Virgin
Islands. Large urbanized areas are those areas with populations of 200,000
or more.
Background
3During the preliminary engineering phase, project sponsors refine the
design of the proposal, taking into consideration all reasonable design
alternatives. This process results in estimates of the project's costs,
benefits, and impacts (e.g., financial or environmental). According to FTA
officials, to gain approval for entry into preliminary engineering, a
project must (1) have been 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. Federal
New Starts funding may be used for preliminary engineering activities, if
so appropriated by Congress.
4Final 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.
5As will be discussed, SAFETEA-LU identified additional criteria for FTA
to use in its evaluation and rating process. However, according to FTA's
January 2006 guidance, FTA does not plan to change the current framework
and methodology for evaluating and rating New Starts projects (i.e.,
non-Small Starts projects) before publishing the new final rule for its
New Starts program, which is expected in January 2008.
Figure 1: New Starts Evaluation Process
More recent than New Starts, the JARC program was created in 1998 in order
to support the nation's welfare reform goals. Without adequate
transportation, welfare recipients face significant barriers in moving
from welfare to work. In 1998, we reported that three-fourths of welfare
recipients live in central cities or rural areas, while two-thirds of new
entry-level jobs are located in suburbs. Public transportation facilities
often offer limited or no access to many of these jobs.6 JARC, which is
administered by FTA, was designed to fill these gaps in transportation
services for low-income individuals.
JARC is intended to increase collaboration among transit agencies, local
human service agencies, nonprofit organizations, and others and to improve
the mobility of low-income individuals seeking work. Programs selected to
receive grants-including the expansion of public transportation routes,
ridesharing activities, and promotion of transit voucher programs-are
designed to assist low-income individuals in accessing employment
opportunities and related services, such as child care and training.
6GAO, Welfare Reform: Implementing DOT's Access to Jobs Program,
GAO/RCED-99-36 (Washington, D.C.: Dec. 8, 1998).
SAFETEA-LU's Changes to the New Starts Program Range from Identifying New
Evaluation Criteria to Establishing the Small Starts Program
SAFETEA-LU made changes to the New Starts program that range from
identifying new evaluation criteria to establishing the Small Starts
program. FTA has taken some initial steps in implementing 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 new component of the New Starts program and is intended to expedite and
streamline the application and review process for small projects. The
transit community, however, questioned whether the program, as outlined in
the ANPRM, would streamline the process. In its January 2006 guidance, FTA
also identified and sought public input on possible changes to the New
Starts program that would affect traditional New Starts projects, or large
starts, such as revising the evaluation process to incorporate the new
evaluation criteria identified by SAFETEA-LU. FTA also 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 Rulemaking Process
SAFETEA-LU introduced eight changes to the New Starts program, codified an
existing practice, and clarified federal funding requirements. These
changes range from the creation of the Small Starts program to introducing
new evaluation criteria. For example, SAFETEA- LU added economic
development to the list of criteria that FTA must use in the New Starts
evaluation process. In addition, SAFETEA-LU codified FTA's requirement
that project sponsors conduct before and after studies for all completed
projects.7 SAFETEA-LU also clarified the federal share requirements for
New Starts projects. In particular, SAFETEA-LU states 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. SAFETEA-LU also 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 addresses FTA's policy of favoring
projects that seek a federal New Starts share of no more than 60 percent
of the total cost. FTA instituted this policy beginning with the fiscal
year 2004 evaluation cycle in response to language contained in
appropriation committee reports. Table 1 describes SAFETEA-LU provisions
for the New Starts program and compares them to TEA-21's requirements.
7A 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.
Table 1: Comparison of SAFETEA-LU's and TEA-21's New Starts Provisions
Provisions SAFETEA-LU TEA-21
Establish the Small o Projects seeking less o Projects seeking
Starts program than $25 million in New less than $25 million
Starts funds will no in New Starts funding
longer be exempt from the were exempt from the
ratings process once the ratings process.
Small Starts final rule o No separate
is issued. program for small
o Establishes a new transit projects.
capital investment
program called Small
Starts for projects that
(1) are corridor based,
(2) have a total project
cost of less than $250
million, and (3) are
seeking less than $75
million in federal Small
Starts funding.
Codify the before Project sponsors with FFGAs Not required under
and after study must conduct a study that TEA-21, but FTA required
requirement (1) describes and analyzes project sponsors to
the impacts of the new fixed conduct a before and
guideway capital project on after study on completed
transit services and transit projects.
ridership, (2) evaluates the
consistency of predicted and
actual project
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 rating is Overall project rating
overall project based on a 5-point scale of was based on 3-point
rating scale "high," "medium-high," scale: "highly
"medium," "medium-low," and recommended,"
"low." Projects are required "recommended," "not
to receive a rating of recommended."
"medium" or higher to be
recommended for funding.
Identify reliability Requires Secretary to Not required under
of cost estimate and analyze, evaluate, and TEA-21.
ridership forecast consider the reliability of
as a consideration the forecasting methods used
in evaluation by New Starts project
process sponsors and their
contractors to estimate
costs and ridership.
Add economic Projects will be evaluated Not required under
development based on a review of their TEA-21.
criterion to effects on local economic
evaluation process development.
Identify land use as Projects will be evaluated Land use was not
a specific based on a review of their identified as an
evaluation criterion public transportation evaluation criterion by
supportive land use policies TEA-21. However, TEA-21
and future patterns. identified land use as a
"consideration" in the
evaluation process and
FTA incorporated it into
the evaluation process.
Clarify nonfederal The Secretary is not Federal share could not
financial commitment authorized to require a exceed 80 percent. But,
nonfederal financial in response to language
commitment for a project contained in
that is more than 20 percent appropriations committee
of its net capital cost. reports, FTA 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 incentives A higher share of New Starts No similar provision in
for accurate cost funding may be made TEA-21.
and ridership available to project
forecasts sponsors if project's cost
is not more than 10 percent
higher and ridership is not
less than 90 percent of
those estimates when project
was approved for preliminary
engineering.
Require FTA to New Starts policy guidance Not required under
publish policy must be published for notice TEA-21.
guidance and comment no later than
120 days after the enactment
of SAFETEA-LU, each time
significant changes are
made, and at least every 2
years.
Assess contractors' The Secretary will submit an Not required under
performance annual report to TEA-21.
congressional committees
analyzing the consistency
and accuracy of cost and
ridership estimates made by
contractors to public
transportation agencies
developing new 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 New Starts policy guidance
and, as will be discussed later, the ANPRM for the Small Starts program.
FTA will continue to implement the changes outlined in SAFETEA-LU through
the rulemaking process over the next year and a half. Specifically, in
response to SAFETEA-LU changes, FTA is developing a Notice of Proposed
Rulemaking (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 2 shows a time line of FTA's actual and
planned implementation of SAFETEA-LU changes.
Figure 2: 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
A significant SAFETEA-LU change was the creation of the Small Starts
program. The Small Starts program is a discretionary grant program for
public transportation capital projects that (1) are corridor-based, (2)
have a total cost of less than $250 million, and (3) 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, but, according
to the conference reports accompanying SAFETEA-LU, is intended to provide
project sponsors with an expedited and streamlined evaluation and rating
process. Table 2 compares New Starts and Small Starts program
requirements.
Table 2: Comparison of New Starts and Small Starts Program Requirements
Program
requirements New Starts Small Starts
Definition of Total project cost is $250 Total project cost is less
eligibility million or more, or $75 million than $250 million, and
or more in federal New Starts less than $75 million in
funding is sought. federal New Starts funding
is sought.
Provides funding for new fixed
guideway systems and Provides funding for new
extensions. fixed guideway systems and
extensions, as well as
corridor-based bus capital
projects.
Project o Mobility improvements o Cost-effectiveness
justification o Environmental benefits (based on opening year
criteria o Operating efficiencies of service)
o Cost-effectiveness o Public
o Public transportation transportation
supportive land use policies supportive land use
o Economic development policies
o Reliability of o Economic development
forecasting o Reliability of
forecasting
Local financial o Stability and reliability o Stability and
commitment of financial plan for reliability of
criteria capital costs financial plan for
o Stability and reliability capital costs
of financial plan for o Stability and
operating and maintenance reliability of
costs financial plan for
o Level of non-New Starts operating and
funding maintenance costs
o Level of non-New
Starts funding
Project o Alternatives analysis o Alternatives
development o Preliminary engineering analysis
process o Final design o Project development
o Construction o Construction
Funding Projects are required to sign Project will use a Project
instrument an FFGA, which sets scope, Construction Grant
cost, and schedule, as well as Agreement, which will be a
maximum New starts share, streamlined version of the
source of other funds, and FFGA.
schedule for obligating funds.
Source: GAO analysis of New Starts and Small Starts requirements.
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 suggests 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
pre-approved 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 a series
of questions for public comment, including the following questions on the
rating and evaluation process:
o How should the evaluation framework for New Starts be changed
or adapted for Small Starts projects?
o How might FTA evaluate economic development and land use as
distinct and separate measures?
o How might FTA incorporate risk and uncertainty into project
evaluations for Small Starts?
o What weights should FTA apply to each measure?
FTA's ANPRM for Small Starts generated a significant volume of
public comment. While members of the transit community were
supportive of some proposals for the Small Starts program, they
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 final 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" option8
and make the before and after study optional for Small Starts
projects to limit the time and cost of project 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 proposed
interim guidance for the Small Starts program in June 2006 to
ensure that project sponsors would have an opportunity to apply
for Small Starts funding and be evaluated in the upcoming cycle
(i.e., the fiscal year 2008 evaluation cycle, which begins in
August 2006). The proposed interim guidance describes the process
that FTA will use to evaluate proposed Small Starts projects to
support the decision to approve or disapprove their advancement to
project development and the decision to recommend projects for
funding, including whether proposed projects are part of a broader
strategy to reduce congestion in particular regions. In addition,
although not required by SAFETEA-LU, FTA introduced a separate
eligibility category within the Small Starts program for "Very
Small Starts" projects in the proposed interim guidance. Small
Starts projects that qualify as Very Small Starts are projects
that
o do not include the construction of a new fixed guideway,
o are in corridors with existing riders who will benefit from the
proposed project and number more than 3,000 on an average weekday,
including at least 1,000 riders who board at the terminal
stations, and
o have a total capital cost of less than $50 million and less
than $3 million per mile (excluding rolling stock).
According to the proposed interim guidance on the Small Starts
program, 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. Small Starts
projects that do not meet all three criteria for Very Small Starts
projects will be evaluated and rated using a framework similar to
that used for traditional, or large starts, New Starts projects.
However, FTA officials have indicated that this evaluation and
rating framework would be modified, for example, to include only
those criteria listed in the statute. FTA is seeking public input
on the Small Starts proposals contained in the proposed interim
guidance through July 9, 2006. FTA plans to review the comments
received and issue its final interim guidance for the Small Starts
program by August 2006. This guidance will govern the program
until the final rule is issued.
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, or large starts, in its January 2006 guidance. According
to FTA, some of SAFETEA-LU provisions could lead to changes in the
definition of eligibility, the evaluation and rating process, and
the project development process. In the guidance, FTA outlines
changes it is considering and solicits 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. 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. 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. (See app. I for a description of the different changes FTA
is considering.)
FTA also identified potential challenges in implementing some of
SAFETEA-LU changes in its guidance. In particular, FTA described
the challenges of incorporating and distinguishing between two
measures of indirect benefits9 in the New Starts evaluation
process-land use and economic development impacts.10 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 they do not measure the
benefits generated by the proposed project. Rather, they 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,11 raising questions as to 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 to
combine land use and economic development into a single measure.
We have also reported on many of the same challenges of measuring
and forecasting indirect benefits, such as economic development
and land use impacts.12 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.
FTA received a large number of written comments on its online
docket in response to its proposed changes. (See app. I 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. 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.
SAFETEA-LU Transformed the JARC Program from a Discretionary to
a Formula-based Program
SAFETEA-LU made a number of changes to the JARC program, the most
notable of which was the creation of a formula to distribute JARC
funds. Whereas funds for JARC projects were congressionally
designated in recent years, SAFETEA-LU's formula distributes funds
to states and large urbanized areas. This is a significant change
because some states and urbanized areas will receive substantially
more funds than under the discretionary program, while others will
receive substantially less. In addition, the formula program will
result in some areas receiving JARC funds that had not received
them in the past. Other JARC changes resulting from SAFETEA-LU
include the ability to use a portion of JARC funds for planning
activities and the removal of a restriction on the JARC funding
available for reverse commute projects, which are designed to help
individuals in urban areas access suburban employment
opportunities. FTA has worked to develop guidance to help JARC
recipients implement these changes by soliciting comments and
input through program notices and listening sessions beginning in
November 2005. FTA issued interim JARC guidance in March 2006 and
is currently working to develop draft final guidance for the
program.13 Final guidance for JARC is expected later this year.
Two potential challenges for FTA as it moves forward will be to
issue final JARC guidance in a timely manner and to determine its
plan for oversight of the JARC program.
SAFETEA-LU Created a Formula for Distributing JARC Funds and
Amended Other Key Aspects of the Program
A key SAFETEA-LU change to the JARC program was the creation of a
formula to distribute JARC funds. Under TEA-21, JARC was a
discretionary grant program for which FTA competitively selected
JARC projects and, more recently, awarded funds for
congressionally designated projects. Under SAFETEA-LU, states and
large urbanized areas have been apportioned funding for JARC
projects through a formula based on the number of low-income
individuals and welfare recipients in each area.14 This is a
significant change because some states and urbanized areas will
receive substantially more funds than under the discretionary
program, while others will receive substantially less. In
addition, the formula program will result in some areas receiving
JARC funds that had not received them in the past. Forty percent
of JARC funds each year are required to be apportioned among
states for projects in small urbanized and other than urbanized
areas, and the remaining 60 percent are required to be apportioned
among urbanized areas with a population of 200,000 or more.15 The
governor of each state must designate a recipient for JARC funds
at the state level to competitively select and award funds for
projects in small urbanized and other than urbanized areas within
the state. In large urbanized areas, the recipient must be
designated by the governor, local officials, and publicly owned
operators of public transportation.
In addition to creating a formula for distributing JARC funds,
SAFETEA-LU also extended a JARC requirement related to coordinated
planning to additional FTA programs and made a number of other
changes to key aspects of the JARC program. In the past, JARC
projects were required to be part of a coordinated public
transit-human services transportation plan; a similar requirement
is included in SAFETEA-LU. However, this requirement will apply in
fiscal year 2007 to two other FTA programs that provide funding
for transportation-disadvantaged populations.16 In addition,
recipients in states and urbanized areas that select JARC projects
must now certify that their selections were based on this plan.
Another change resulting from SAFETEA-LU is the ability of a
recipient to use up to 10 percent of its JARC allocation for
administration, planning, and technical assistance,17 and the
expansion of the definition of eligible activities to include
planning as well as capital and operating activities. SAFETEA-LU
also removed a restriction on the amount of funding available for
reverse commute projects to help individuals in urban areas gain
access to suburban employment opportunities. Table 3 compares key
JARC provisions under SAFETEA-LU and TEA-21.
8FTA 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.
FTA Also Identified Possible Changes to the New Starts Program in Response to
SAFETEA-LU as well as Implementation Challenges
9Direct 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.
10SAFETEA-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.
11Indirect 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.
12GAO, 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).
SAFETEA-LU Transformed the JARC Program from a Discretionary to a Formula-based
Program
13FTA refers to guidance for grantees and stakeholders as a "circular;" in
this testimony, we refer to FTA's draft and final circulars for JARC as
draft final guidance and final guidance.
SAFETEA-LU Created a Formula for Distributing JARC Funds and Amended Other Key
Aspects of the Program
14The SAFETEA-LU formula apportions JARC funds on the basis of "eligible"
low-income individuals in an area. Eligible low-income individuals are
defined in SAFETEA-LU as individuals whose family income is at or below
150 percent of the poverty line.
15In information on the JARC program, FTA refers to urbanized areas with a
population of 200,000 or more as large urbanized areas, urbanized areas
with a population of between 50,000 and 200,000 as small urbanized areas,
and rural and small urbanized areas with populations of less than 50,000
as other than urbanized areas.
Table 3: Comparison of SAFETEA-LU's and TEA-21's JARC Provisions
Provision SAFETEA-LU TEA-21
Distribute JARC o Requires the Secretary of o The Secretary
funds by formula Transportation to apportion funds of
among states and designated Transportation
recipients of large urbanized required to
areas through a formula that conduct a
considers the number of eligible national
low-income individualsa and solicitation for
welfare recipients in each state applications for
or large urbanized area relative grants and to
to other states or large select grantees
urbanized areas. on a competitive
o Sixty percent of JARC funds basis.
are apportioned to designated o The same
recipients of urbanized areas percentage of
with a population of 200,000 or JARC funds
more, 20 percent are apportioned allocated among
to states for projects in large urbanized
urbanized areas with a population areas, small
of less than 200,000, and 20 urbanized areas,
percent are apportioned to states and other than
for projects in other than urbanized areas
urbanized areas. as provided
under
SAFETEA-LU.
Designate JARC The governor must designate a Not required under
recipient recipient at the state level to TEA-21. Rather, FTA
competitively select and award funds competitively
for projects in small urbanized and selected JARC
other than urbanized areas, and projects and more
within each large urbanized area to recently awarded
competitively select and award funds funds for projects
in that area. that were
congressionally
designated.
Use coordinated o JARC projects selected for JARC projects
public funding must be derived from a required to be part
transit-human locally developed coordinated of a coordinated
services public transit-human services public
transportation transportation plan; designated transit-human
plan to select recipients must certify that services
projects for selected projects were derived transportation
funding from this plan. planning process,
o Additional FTA programs that but no requirement
provide funding for services for to certify that
transportation-disadvantaged selected projects
populations also subject to this were derived from
requirement beginning in fiscal this plan.
year 2007.b
Use competitive Designated recipients in urbanized Secretary of
selection process areas required to conduct a Transportation
solicitation for applications for required to conduct
grants in cooperation with the a national
appropriate metropolitan planning solicitation for
organization;c designated recipients applications for
in states required to conduct a grants and to
statewide solicitation for select grantees on
applications for grants. Grants are a competitive
to be awarded on a competitive basis. In practice,
basis. however, projects
were
congressionally
designated in
recent years.
Allow the use of o A recipient may use up to 10 No statutory
funds for percent of its apportionment to provision for
administration, administer, plan, and provide administration and
planning, and technical assistance for JARC technical
technical projects. assistance under
assistance o Planning is also included as TEA-21.d Planning
an eligible expense along with and coordination
capital and operating expenses. activities were
prohibited
expenses.
Provide for States may transfer funds among the No provision under
transfers of JARC small urbanized area and other than TEA-21.
funds urbanized area apportionments if the
governor certifies that JARC
objectives are being met in the
specified area. States may also
transfer funds from the small
urbanized area and other than
urbanized area apportionments to
projects in any area in the state if
it has a statewide program for
meeting JARC objectives.
Increase JARC grants for capital projects may Grants for projects
government's not exceed 80 percent of the net could not exceed 50
share of capital capital costs of the project; grants percent of the
costs for operating assistance may not total project cost;
exceed 50 percent of the net no differentiation
operating costs of the project. among capital and
operating projects.
Remove limit on No limit on the amount that can be No more than $10
reverse commute used for reverse commute projects. million could be
project funding used each fiscal
year for reverse
commute project
grants.
16"Transportation-disadvantaged populations" refers to populations that
lack the ability to provide their own transportation or have difficulty
accessing whatever conventional public transportation may be available.
FTA programs in addition to JARC that serve these populations are the
Elderly Individuals and Individuals with Disabilities program, which
provides formula funding for capital projects to assist in meeting the
transportation needs of the elderly and persons with disabilities; and the
New Freedom program, which provides formula funding for new public
transportation services and public transportation alternatives that assist
individuals with disabilities with transportation, including
transportation to and from jobs and employment support services.
17While TEA-21 had not included a statutory provision regarding a
percentage that could be used for administration and technical assistance,
FTA allowed JARC grantees to use up to 10 percent for these activities.
Source: GAO analysis of TEA-21 and SAFETEA-LU.
aEligible low-income individuals are those whose family income is at or
below 150 percent of the poverty line.
bFTA programs in addition to JARC that serve these populations are the
Elderly Individuals and Individuals with Disabilities program and the New
Freedom program.
cMetropolitan planning organizations are federally mandated regional
organizations responsible for comprehensive transportation planning and
programming in urbanized areas.
dFTA allowed JARC grantees to use up to 10 percent for administration and
technical assistance activities.
Some of these changes address issues that we have raised in past reports
on JARC and the coordination of transportation services for
transportation-disadvantaged populations.18 For example, in 2004 we
reported that a majority of the JARC grantees we spoke with supported a
proposal to use grant funds for administrative, planning, and technical
assistance activities, because these activities could increase
coordination with potential partners. In 2003, we also reported that some
federal and state officials believed that providing financial incentives
or mandates for coordination was one way to improve the coordination of
transportation services among federal programs. In addition, officials of
one metropolitan planning organization that we spoke to about changes to
the JARC program also note that the change to a formula program may better
facilitate cooperation between organizations. They explained that the
required coordinated plans for JARC projects became irrelevant in the past
when JARC funds were congressionally designated.
FTA Has Developed Interim JARC Guidance and Plans to Issue Final Program
Guidance Later This Year
FTA has been working to develop guidance to help JARC recipients implement
changes to the program. In November 2005, FTA published a notice of
changes for FTA programs, including JARC. This notice provided information
on the JARC program and solicited public comment on aspects of the program
such as technical assistance needs and the coordinated planning process.
FTA also held five public listening sessions across the country in
December 2005 on a number of programs, including JARC, to obtain comments
and input on the questions and issues that should be included in future
guidance. In March 2006, drawing on the information FTA received through
comments and the listening sessions, it released interim JARC guidance for
fiscal year 2006 and proposed strategies for fiscal year 2007, and sought
comments to assist in the development of program guidance.19 FTA received
more than 200 comments on this notice, and the comments addressed a
variety of issues, including the coordinated planning requirement for JARC
and other programs and the selection of designated recipients. For
example, several private operators of transportation services have
requested that FTA include language that private transportation operators
be involved in the coordinated planning process. A number of comments have
also addressed whether there would be a potential conflict of interest in
having a provider of transportation services also serve as the designated
recipient that will select JARC projects for funding. FTA officials have
indicated that they plan to address many of the issues raised in the
comments in draft final guidance for JARC that they plan to release later
this summer. FTA plans to solicit comments on the draft final guidance and
issue final guidance for JARC later this year. Figure 3 presents a time
line for FTA's implementation of changes to the JARC program.
18GAO, Job Access and Reverse Commute: Program Status and Potential
Effects of Proposed Legislative Changes, GAO-04-934R (Washington, D.C.:
Aug. 20, 2004). GAO, Transportation-Disadvantaged Populations: Some
Coordination Efforts Among Programs Providing Transportation Services, but
Obstacles Persist, GAO-03-697 (Washington, D.C.: June 30, 2003).
19The March 2006 notice also addressed the Elderly Individuals and
Individuals with Disabilities program and the New Freedom program.
Figure 3: Time Line for FTA's Implementation of SAFETEA-LU Changes to the
JARC Program
Through our preliminary work, we have identified two challenges that FTA
may encounter as it moves forward in its implementation of changes to
JARC. One potential challenge for FTA will be to ensure that it develops
JARC guidance in a timely manner so that JARC recipients can implement the
program. Officials from one metropolitan planning organization we spoke
with about JARC changes noted that the guidance will be important because
it will address questions that JARC recipients have raised about the
program's implementation and to which they have received conflicting
answers from FTA headquarters and regional staff. A publicly available
schedule of FTA deliverables related to SAFETEA-LU's implementation stated
that draft final guidance for JARC was anticipated between May and July
2006. However, FTA officials told us that they now expect to issue the
draft final guidance in late July or early August. This change reflects
FTA's extension of the comment period for the March 2006 notice by 1 month
to receive additional comments, and the submission of more than 100
comments on or after the last day of the comment period. The additional
comments raised a number of issues for FTA to consider, according to FTA
officials. While FTA has stated that criteria in the final guidance will
not apply retroactively to issued grants so that areas can proceed with
JARC projects, FTA officials as well as officials from an association that
represents metropolitan planning organizations have told us that some
recipients of JARC funds will likely wait for final program guidance
before proceeding. In addition, few states and urbanized areas have taken
formal steps to apply for fiscal year 2006 funds. As of late May, 5 states
had notified FTA of their designated recipient for JARC funding, and 1 of
the 152 urbanized areas that receive a JARC apportionment had obligated
fiscal year 2006 JARC funds, according to FTA officials.
Another potential challenge for FTA in moving forward will be to determine
its plan for overseeing the JARC program. FTA officials have told us that
they are still developing this plan, and that at a minimum they expect to
use routine grant management tools-such as progress reports and site
visits-to oversee JARC recipients. In its interim guidance, FTA also
indicates that it intends to use existing oversight mechanisms from the
federal urbanized area and nonurbanized area formula programs, such as
triennial reviews and state management reviews. However, FTA officials
acknowledge they need to determine how to incorporate JARC grant
recipients into these oversight processes.
Transparency, Communication, and Accountability Issues Will Continue to Be
Important
Our past work suggests that transparency, communication, and
accountability issues will be important as FTA moves forward in
implementing SAFETEA-LU changes to the New Starts and JARC programs. Like
SAFETEA-LU, TEA-21 required GAO to regularly review the New Starts and
JARC programs. Since 1998, we have issued numerous reports on these
programs, and many of the reports contained recommendations to FTA on ways
to improve the implementation of these programs. SAFETEA-LU addressed some
of these issues, and FTA has also taken steps to resolve some of them.
Nevertheless, given the number of changes that are being made to both
programs, continued focus on improving transparency, communication, and
accountability will be important.
In our recent reports on the New Starts program, we noted several cases in
which FTA could have improved the program's transparency. Typically, these
cases dealt with FTA's decisions not to seek public input on proposed
policy changes before they were implemented. In our 2005 report, we found
that FTA had made 16 changes to the New Starts process since fiscal year
2001, but had not published information about the changes in the Federal
Register or instituted a rulemaking process for 9 of the changes;
moreover, for 6 of the 9 changes, FTA did not provide any avenues for
public review and comment.20 For example, during the fiscal year 2004
cycle, FTA instituted a preference policy in its ratings process favoring
current and future projects that do not request more than a 60 percent
federal funding share. However, FTA did not amend its regulations to
reflect this change in policy or its existing procedures, and the public
did not have an opportunity to comment on the impact of the change prior
to its adoption.
SAFETEA-LU addressed our past concerns about the transparency of the New
Starts program by requiring FTA to publish for notice and comment any
proposals that make significant changes to the New Starts program. FTA has
already implemented this requirement. For instance, earlier this year, FTA
gave the transit community an opportunity to review and comment on
proposed procedural changes (i.e., nonregulatory changes) to the New
Starts process as well as possible changes FTA was considering for the New
Starts program in the future. Although members of the transit community
expressed concerns about some of FTA's proposed changes in their comments,
project sponsors and industry representatives repeatedly told us that they
appreciated the opportunity to review and comment on the proposals. FTA
officials have also stated that they have been pleased with the review and
comment process, noting that it helps to ensure that FTA's guidance is
more complete, more responsive to stakeholders' needs, and more likely to
take into account on-the-ground realities.
We have also previously reported shortfalls in FTA's communication of New
Starts program changes to project sponsors that in several cases, have
resulted in implementation problems. For example, in our 2003 report,21 we
noted that a number of project sponsors were unable to calculate a valid
Transportation System User Benefits (TSUB) value, and as a result, their
projects received a "not rated" rating for the cost-effectiveness
criterion.22 Project sponsors commented that they would have benefited
from additional guidance and technical support on how to generate the
required data for the TSUB measure. Similarly, during the fiscal year 2005
evaluation cycle, FTA introduced a requirement for project sponsors to
submit a "make the case" document to articulate the benefits of a proposed
New Starts project. FTA officials intended to use the document to help
interpret data produced by the local travel forecasting models, but FTA
did not prepare any written guidance on what information to include or
provide report templates. Without such information, project sponsors
stated that they did not understand what should be included in the
document or how it would be used, and FTA officials later acknowledged
that many of the submissions did not meet their expectations.
20GAO, 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).
21GAO, Mass Transit: FTA Needs to Provide Clear Information and Additional
Guidance on the New Starts Rating Process, GAO-03-701 (Washington, D.C.:
June 23, 2003).
SAFETEA-LU addressed these communication problems by requiring that FTA
routinely publish policy guidance. Specifically, SAFETEA-LU requires that
FTA publish policy guidance for comment and response no later than 120
days after the enactment of SAFETEA-LU, each time significant changes are
made, and at least every 2 years. FTA responded to this requirement by
publishing policy guidance for the New Starts program in January 2006 and
soliciting public comments on the proposed changes outlined in the
guidance. Furthermore, in its January guidance, FTA included possible
long-term changes to the large starts component of the New Starts program
that FTA is considering. FTA stated that it hoped to use the policy
guidance as a forum for discussing possible changes with the transit
community so that FTA could take the community's comments into account
when developing the NPRM for the New Starts program. In addition, FTA held
multiple listening sessions across the country, during which officials
told project sponsors about proposed changes to the New Starts program and
their rationale for implementing these changes. Most of the project
sponsors and industry representatives we interviewed told us that they
appreciated FTA's efforts to solicit their feedback and to encourage an
open discussion about the proposed changes.
22FTA noted that the projects received "not rated" ratings because project
sponsors were not following FTA requirements for development of
alternatives, resulting in a misrepresentation of the projects' user
benefits.
Finally, we have identified steps for increasing the accountability of the
New Starts and JARC programs. For example, we previously reported that
outcome evaluations of completed transit and highway projects were not
usually conducted to determine whether proposed outcomes were achieved.23
We noted that because outcome evaluations are not usually completed,
agencies miss an opportunity to learn from the successes and shortcomings
of past projects to better inform future planning and decision making and
increase accountability for results. FTA also identified such evaluations
as an opportunity to hold agencies accountable for results and identify
lessons learned, and therefore, starting in fiscal year 2003, FTA required
project sponsors to complete before and after studies for completed New
Starts projects. SAFETEA-LU codified the requirement for before and after
studies, and required that these studies (1) describe and analyze the
impacts of the new fixed guideway capital project on transit services and
transit ridership, (2) evaluate the consistency of predicted and actual
project characteristics and performance, and (3) identify sources of
differences between predicted and actual outcomes. In addition, SAFETEA-LU
included several provisions, including the following, that emphasize the
accuracy and consistency of project cost and ridership estimates in the
New Starts process:
o SAFETEA-LU requires the Secretary of Transportation to consider
the reliability of the forecasting methods used by New Starts
project sponsors and their contractors to estimate costs and
ridership as part of the New Starts evaluation process.
o SAFETEA-LU allows the Secretary of Transportation to provide a
higher grant percentage than requested by the project sponsor if
the net cost of the project is not more than 10 percent higher
than the net cost estimated at the time the project was approved
for advancement into preliminary engineering and 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 preliminary engineering.
o SAFETEA-LU requires the Secretary of Transportation to submit
an annual report to congressional committees analyzing the
consistency and accuracy of cost and ridership estimates made by
contractors to public transportation agencies developing new
projects.
Likewise, we have raised issues associated with FTA's measurement
of the JARC program's results and made recommendations for
improvement. In April 2002, we testified that FTA had not yet
completed its evaluation of the JARC program or reported to
Congress,24 as TEA-21 required.25 We also expressed concerns about
FTA's plan to evaluate the program using one performance
measure-the number of accessible employment sites-because it would
not allow FTA to fully address key aspects of the program or
criteria for selecting grantees. We reiterated these concerns in
our December 2002 report and recommended that FTA report to
Congress on the results of its evaluation of JARC, as required by
law, and consider as part of its evaluation of the effectiveness
of the JARC program in meeting both of its goals.26 Our most
recent review of the JARC program concluded that the data used in
FTA's 2003 evaluation of the JARC program lacked the consistent,
generalizable, and complete information needed to draw any
definitive conclusions about the program as a whole.27 According
to FTA, it has faced obstacles in evaluating the JARC program
primarily because grantees have had difficulty collecting and
reporting information on their programs. SAFETEA-LU requires the
Secretary of Transportation to evaluate the JARC program and
submit a report describing the results of this study to Congress
by August 2008. Specifically, the Secretary must conduct a study
to evaluate the effectiveness of the grant program and the
effectiveness of recipients making grants to subrecipients. FTA
has already begun to take some steps to meet its evaluation
requirements, even prior to issuing its final program guidance.
These steps may also address some of the concerns we previously
raised about FTA's evaluation of the JARC program. For example,
FTA has identified new performance measures and goals, developed a
preliminary performance evaluation framework to guide its data
collection efforts, and is currently in the process of researching
options for simplifying its data collection system and reducing
the reporting requirements for grantees.
Mr. Chairman, this concludes my statement. I would be pleased to
answer any questions that you or other Members of the Subcommittee
may have at this time.
Contact Information
For further information on this testimony, please contact
Katherine Siggerud at (202) 512-2834 or [email protected] .
Individuals making key contributions to this testimony include
Vidhya Ananthakrishnan, Nikki Clowers, John Finedore, Lauren Heft,
Daniel Hoy, Jessica Lucas-Judy, Nancy Lueke, and Kimanh Nguyen.
Appendix I: FTA�s Proposed Changes to the New Starts Program
In its January 2006 guidance, the Federal Transit Administration
(FTA) identified possible changes to the New Starts program in
response to the Safe, Accountable, Flexible, Efficient
Transportation Equity Act: A Legacy for Users (SAFETEA-LU).
According to FTA, some of SAFETEA-LU's provisions may lead to
changes in the program's definition of eligibility, evaluation and
rating process, and project development process. The following
table summarizes the changes FTA has proposed in these three
areas, FTA's rationale for the proposed changes, and the transit
community's response to the proposed changes.
Comments submitted
by the transit
Proposed change FTA's rationale for change community
Eligibility definition
Definition of a fixed A fixed guideway has o The current
guideway: FTA asks not been specifically definition of fixed
whether a Bus Rapid defined in the guideway works well;
Transit project is a statute. thus, FTA should make
"fixed guideway" project no changes.
and whether it should o A minimum percentage
fund high-occupancy of the guideway (e.g.,
vehicle (HOV) projects to 30-75 percent) should
the degree that they be dedicated in order
provide benefits to for a project to get
public transit riders. funding.
o HOV projects should
be funded by the
Federal Highway
Administration.
Project evaluation and o
ratings process
Evaluation framework: FTA The current o Both proposed
proposes two options for evaluation framework options raise concerns
revising the evaluation might be improved because they continue
framework. Option 1 would upon. to define
extend the current cost-effectiveness only
framework to include in terms of mobility.
economic development o Neither proposed
impacts and the option gives enough
reliability of weight to land use and
forecasting methods for economic development.
costs and ridership.
Option 2 would be a
broader framework that
incorporates the new
evaluation factors
specified by SAFETEA-LU
and, according to FTA,
organizes the measures to
support a more
informative, analytical
discussion of the project
and its merits for New
Starts funding.
Nature of the problem or New Starts projects o Funding should be
opportunity evaluation are intended to solve available for projects
measure: FTA asks whether specific seeking to shape
measures that represent transportation economic development or
the nature of the problem problems, take to provide a solution
or the opportunity the advantage of to mobility problems.
proposed projects are opportunities to
designed to address improve
should be included in the transportation
evaluation framework, and services, or support
how FTA should evaluate economic development.
or rate projects 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 transit
economic development project. There are too
benefits: (1) regional many other variables
economic benefits and (2) associated with
station area development regional economic
impacts. FTA sought benefits.
comment on whether there o FTA should use both
was preference for either regional and station
option, as well as on how area economic benefits.
to evaluate economic o Land use and
development and land use economic development
as distinct and separate should be separate
measures. measures and carry as
much weight as cost-
effectiveness.
o Differentiating
between land use and
economic development is
difficult.
Mobility benefits The measure of o FTA should continue
measure: FTA proposes to mobility benefits to work toward
measure mobility by using ought to capture as capturing
a combination of user many benefits as transportation benefits
benefits per passenger possible. to highway users in a
mile and project project corridor.
ridership. FTA also asked o FTA should analyze
whether other measures of the impact of
mobility benefits could non-home-based trips,
be used. trips generated by
special events, and
automobile trips not
taken because of
enhanced pedestrian
activity established in
a project corridor.
Mobility for transit Since low-income o 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 and
lowest income stratum. 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.
FTA's previous
measure-percentage of
low income households
in the project
corridor-is somewhat
imprecise.
Environmental benefits SAFETEA-LU maintained o FTA should retain
measure: FTA proposes to environmental its current measure of
continue using the same benefits as an environmental benefits.
environmental benefits evaluation criterion.
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 o 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 efficiency criterion.
instead on an evaluation not distinguish among
of cost-effectiveness to proposed projects.
address the statutory
criterion. According to
FTA, the impact of the
project on operating and
maintenance costs is
captured in the
calculation of
cost-effectiveness.
Cost-effectiveness The current measure o Broadening the
measure: FTA proposes to of cost-effectiveness cost-effectiveness
broaden the current does not capture measure would increase
cost-effectiveness non-transportation the time and cost of
measure to include benefits. project development.
nontransportation o FTA should use the
benefits, such as consumer price index,
economic development not the gross domestic
benefits, land use product index, to
impacts, and mobility adjust the dollar value
benefits to transit of the
dependents. FTA also cost-effectiveness
suggests using two threshold.
cost-effectiveness
measures-one for the
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 from
measure: FTA proposes the following factors the guidance who is
changing the way the that FTA must use in responsible for
financial rating factors evaluating financial assessing the
related to uncertainty capability: (1) the reliability of
are incorporated into the reliability of financial forecasts.
evaluation process. forecasting methods o The emphasis placed
Specifically, FTA for costs and on the reliability of
suggests using the ridership, (2) the financial forecast
project sponsor's ability existing grant should correlate to the
to absorb funding commitments, (3) the stage of project
shortfalls and cost degree to which development.
overruns as an explicit funding sources are
measure of financial dedicated, (4) debt
risk. obligations of the
project sponsor, and
(5) the non-New
Starts funding share.
Reliability of forecasts SAFETEA-LU requires o Proposal is
measures: FTA proposes to that the reliability confusing.
assess the risk and of the forecasting o Recent experience
uncertainty inherent in methods used to with risk assessments
project evaluation. estimate costs be suggests that the
Specifically, FTA plans considered in the proposal would require
to evaluate the evaluation of New substantial effort with
uncertainty associated Starts projects. little reduction in
with the nature and uncertainty.
severity of the problem, o FTA should place
as well as individual significant weight on
measures of project merit the project sponsor's
and cost-effectiveness ability to enhance the
measures. reliability of
forecasts through the
proven quality control
methods.
Development of project SAFETEA-LU requires o Economic development
ratings: Currently, FTA that the reliability and land use should
develops separate ratings of the forecasting receive the same weight
for project justification methods used to as cost-effectiveness.
and local financial estimate costs be
commitment, and then considered in the
derives an overall evaluation of New
project rating from these Starts projects.
component ratings using
decision rules. FTA
proposes to use a similar
process for rating
projects. However, FTA
states that the
reliability of forecasts
needs to be incorporated
into the ratings process,
and 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.
Project development
process
Local endorsement of the SAFETEA-LU requires that o Securing an
financial plan: FTA FTA ensure that proposed endorsement will
proposes to require that New Starts projects are be overly
project sponsors specify supported by an acceptable burdensome and
all proposed sources of degree of local financial delay project
funding in the financial commitment and resources. development.
plan, and that the o FTA should not
sponsoring agency provide FTA has experienced dictate when
a letter endorsing the situations in which a project sponsors
proposed financial project's financial plans receive financial
strategies and amounts of state that local agencies commitments.
planned funding by those will provide funding, but o Hard to fully
agencies identified as in reality those local secure funding
funding sources. agencies do not support the commitments in
project plan. preliminary
engineering and
final design.
Approval of the baseline There has been significant o More clarity
alternative: FTA proposes confusion over the needed on how FTA
to maintain the current definition of the baseline defines baseline
approval process and alternative. alternative.
definition of the o Selection of
baseline alternative. baseline
However, FTA asks whether alternative
the baseline can be more should not be
clearly defined and driven by FTA.
whether there is a way to
report on the benefits of
the project including the
benefits attributable to
the difference between
the no-build and the
baseline alternatives.
On-board transit survey: Data on current ridership o Surveys are
FTA is considering patterns are essential to expensive and may
requiring that a recent the development of reliable be unnecessary in
survey of transit riders forecasts. some areas.
be used to inform the o FTA should
technical work completed consider other
during alternatives means of
analysis. FTA suggests collecting data
that "recent" could be on ridership,
defined as within the 5 such as
years preceding a request electronic fare
to enter preliminary collection data
engineering. and small sample
surveys.
Preliminary engineering Since the completion of o Need a clearer
purpose and exit preliminary engineering for definition of
criteria: FTA is proposed projects preliminary
considering defining the represents the completion engineering phase
preliminary engineering of nearly all the steps to help project
phase as the process of needed to make a final sponsors target
finalizing the project's decision on the actual resources.
scope, cost, and implementation of the o Design costs
financial plan such that proposed project, the will be
(1) all environmental information for making that frontloaded,
impacts are identified final decision must be thereby
and adequate provisions reliable. increasing the
are made for their costs of
mitigation in accordance preliminary
with National engineering.
Environmental Policy Act
(NEPA), (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.
Project reaffirmation by Before a project is o Creates
the metropolitan planning approved for advancement another step that
organization (MPO): FTA into preliminary will increase
is considering requiring engineering, the project time and cost of
that the sponsoring must be adopted by the MPO project
agencies reaffirm their into its long-range development.
adoption of the project transportation plan. o Duplicates
in its final However, a project's scope sponsors' ongoing
configuration and costs and costs may change during work with the MPO
into the MPO's long range the preliminary engineering and provides no
transportation plan as phase. Thus, this added certainty.
part of the application requirement would ensure o Will likely
to advance the project to that a revised project have limited
final design. still conforms to the MPO's impact on local
transportation plans and financial
financial investment endorsement.
strategies. o Inconsistent
with Federal
Highway
Administration
regulations.
New Starts funding share SAFETEA-LU allows the o Incentive
incentives: FTA asks how Secretary to provide a money should be
it should implement the higher grant percentage invested back
provision in SAFETEA-LU than requested by the into the New
that would give FTA project sponsor if (1) the Starts program.
discretion to provide a net cost of the project is o Incentive
higher percentage of New not more than 10 percent should focus on
Starts funding than that higher than the net cost the project's
requested by the project estimated at the time the outcomes like
sponsor as an incentive project was approved for project impacts.
to produce reliable advancement into
ridership and cost preliminary engineering,
estimates. 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
preliminary engineering.
Source: GAO analysis of FTA guidance and public comments posted on
FTA's docket.
Related GAO Products
New Starts reports and testimonies
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.
Mass Transit: FTA Needs to Better Define and Assess Impact of
Certain Policies on New Starts Program. GAO-04-748 . Washington,
D.C.: June 25, 2004.
Mass Transit: FTA Needs to Provide Clear Information and
Additional Guidance on the New Starts Ratings Process. GAO-03-701
. Washington, D.C.: June 23, 2003.
Mass Transit: Status of New Starts Program and Potential for Bus
Rapid Transit Projects. GAO-02-840T . Washington, D.C.: June 20,
2002.
Mass Transit: FTA's New Starts Commitments for Fiscal Year 2003.
GAO-02-603 . Washington, D.C.: April 30, 2002.
Mass Transit: FTA Could Relieve New Starts Program Funding
Constraints. GAO-01-987 . Washington, D.C.: August 15, 2001.
Mass Transit: Implementation of FTA's New Starts Evaluation
Process and FY 2001 Funding Proposals. GAO/RCED-00-149 .
Washington, D.C.: April 28, 2000.
Mass Transit: Status of New Starts Transit Projects With Full
Funding Grant Agreements. GAO/RCED-99-240 . Washington, D.C.:
August 19, 1999.
Mass Transit: FTA's Progress in Developing and Implementing a New
Starts Evaluation Process. GAO/RCED-99-113 . Washington, D.C.:
April 26, 1999.
JARC reports and testimonies
Job Access and Reverse Commute: Program Status and Potential
Effects of Proposed Legislative Changes. GAO-04-934R . Washington,
D.C.: August 20, 2004.
Welfare Reform: Job Access Program Improves Local Service
Coordination, but Evaluation Should Be Completed. GAO-03-204 .
Washington, D.C.: December 6, 2002.
Welfare Reform: DOT Has Made Progress in Implementing the Job
Access Program but Has Not Evaluated Impact. GAO-02-640T .
Washington, D.C.: April 17, 2002.
Welfare Reform: Competitive Grant Selection Requirement for DOT's
Job Access Program Was Not Followed. GAO-02-213 . Washington,
D.C.: December 7, 2001.
Welfare Reform: GAO's Recent and Ongoing Work on DOT's Access to
Jobs Program. GAO-01-996R . Washington, D.C.: August 17, 2001.
Welfare Reform: DOT Is Making Progress in Implementing the Job
Access Program. GAO-01-133 . Washington, D.C.: December 4, 2000.
Welfare Reform: Implementing DOT's Access to Jobs Program in Its
First Year. GAO/RCED-00-14 . Washington, D.C.: November 26, 1999.
Welfare Reform: Implementing DOT's Access to Jobs Program.
GAO/RCED-99-36 . Washington, D.C.: December 8, 1998.
Welfare Reform: Transportation's Role in Moving from Welfare to
Work. GAO/RCED-98-161 . Washington, D.C.: May 29, 1998.
Other transit-related reports
Highway and Transit Investments: Options for Improving Information
on Projects' Benefits and Costs and Increasing Accountability for
Results. GAO-05-172 . Washington, D.C.: January 24, 2005.
Transportation Disadvantaged Populations: Some Coordination
Efforts Among Programs Providing Transportation Services, but
Obstacles Persist. GAO-03-697 . Washington, D.C.: June 30, 2003.
Transit Labor Arrangements: Most Transit Agencies Report Impacts
Are Minimal. GAO-02-78 . Washington, D.C.: November 19, 2001.
Mass Transit: Many Management Successes at WMATA, but Capital
Planning Could Be Enhanced. GAO-01-744 . Washington, D.C.: July 3,
2001.
Transit Grants: Need for Improved Predictability, Data, and
Monitoring in Application Processing. GAO/RCED-00-260 .
Washington, D.C.: August 30, 2000.
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23GAO, 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).
24GAO, Welfare Reform: DOT Has Made Progress in Implementing the Job
Access Program but Has Not Evaluated the Impact, GAO-02-640T (Washington,
D.C.: Apr. 17, 2002).
25TEA-21 required DOT to evaluate the JARC program and submit a report to
Congress by June 2000.
26GAO, Welfare Reform: Job Access Program Improves Local Coordination, but
Evaluation Should Be Completed, GAO-03-204 (Washington, D.C.: Dec. 6,
2002).
27 GAO-04-934R .
(542095)
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Highlights of GAO-06-910T , a testimony for the Subcommittee on Housing
and Transportation, Committee on Banking, Housing, and Urban Affairs, U.S.
Senate
June 27, 2006
PUBLIC TRANSPORTATION
Preliminary Information on FTA's Implementation of SAFETEA-LU Changes
The Safe, Accountable, Flexible, Efficient Transportation Equity Act: A
Legacy for Users (SAFETEA-LU) authorized a significant level of
investment-over $52 billion-for federal transit programs. SAFETEA-LU also
added new transit programs and made changes to existing programs,
including the New Starts and Job Access and Reverse Commute (JARC)
programs. The New Starts program is a discretionary grant program for
public transportation capital projects. The JARC program is intended to
improve the mobility of low-income individuals seeking work. SAFETEA-LU
authorized $8.6 billion for these two programs. The Federal Transit
Administration (FTA) manages both of these programs.
This testimony discusses GAO's preliminary findings on the (1) changes
SAFETEA-LU made to the New Starts program, (2) changes SAFETEA-LU made to
the JARC program, and (3) issues that may be important as FTA moves
forward with implementing the act. To address these objectives, GAO
interviewed FTA officials, sponsors of New Starts projects, and
representatives from industry associations and reviewed FTA's guidance on
the New Starts and JARC programs and federal statutes, among other things.
The changes SAFETEA-LU made to the New Starts program range from
establishing the Small Starts program to introducing new evaluation
criteria. FTA has taken some initial steps in implementing SAFETEA-LU
changes, including issuing an Advanced Notice of Proposed Rule Making
(ANPRM) for the Small Starts program and guidance for the New Starts
program in January 2006. The Small Starts program is intended to offer
small projects an expedited and streamlined application and review
process; however, the transit community has questioned whether the Small
Starts program, as outlined in the ANPRM, would provide such a process.
FTA's guidance for the New Starts program identified and sought public
input on possible changes to the program that would affect traditional New
Starts projects, or large starts, such as revising the evaluation process
to incorporate the new criteria identified by SAFETEA-LU.
SAFETEA-LU also made a number of changes to the JARC program. One key
change was to change JARC from a discretionary to a formula-based program,
which provides funds to states and large urbanized areas for JARC
projects. Other SAFETEA-LU changes include allowing JARC recipients to use
a portion of funds for planning activities and removing a limit on the
amount of funds available for reverse commute projects. To implement these
changes, FTA solicited comments and input through public listening
sessions and program notices. FTA has released interim guidance for fiscal
year 2006, is currently developing draft final guidance for the JARC
program, and plans to issue final guidance later this year.
GAO's past work suggests that transparency, communication, and
accountability issues will be important as FTA moves forward in
implementing SAFETEA-LU changes to the New Starts and JARC programs. Since
1998, GAO has issued numerous reports on these programs, and many of the
reports contained recommendations to FTA on ways to improve the
implementation of these programs. For example, GAO has reported that FTA
could increase the transparency of the New Starts program by obtaining
public input on proposed policy changes before they are implemented.
SAFETEA-LU addressed some of these issues, and FTA has also taken steps to
resolve some of them. For example, SAFETEA-LU requires FTA to publish for
notice and comment any proposals that make significant changes to the New
Starts program. Nevertheless, given the number of changes that are being
made to both programs, continued focus on efforts to improve transparency,
communication, and accountability will be important.
FTA officials provided technical comments on a draft of this testimony,
which were incorporated where appropriate.
*** End of document. ***