Public Transportation: Preliminary Analysis of Changes to and	 
Trends in FTA's New Starts and Small Starts Programs (10-MAY-07, 
GAO-07-812T).							 
                                                                 
Through the New Starts program, the Federal Transit		 
Administration (FTA) identifies and recommends new fixed-guideway
transit projects for funding--including heavy, light, and	 
commuter rail; ferry; and certain bus projects. The Safe,	 
Accountable, Flexible, Efficient Transportation Equity Act: A	 
Legacy for Users (SAFETEA-LU) authorized the New Starts program  
through fiscal year 2009 and made a number of changes to the	 
program, including creating a separate program commonly called	 
Small Starts. This program is intended to offer an expedited and 
streamlined evaluation and rating process for smaller-scale	 
transit projects. FTA subsequently introduced a separate	 
eligibility category within the Small Starts program for "Very	 
Small Starts" projects. Very Small Starts projects are simple,	 
low-risk projects that FTA has determined qualify for a 	 
simplified evaluation and rating process. This testimony	 
discusses GAO's preliminary findings on (1) FTA's implementation 
of SAFETEA-LU changes to the New Starts program, (2) the extent  
to which the New Starts pipeline (i.e., projects in the 	 
preliminary engineering and final design phases) has changed over
time, and (3) future trends for the New Starts and Small Starts  
pipelines. To address these objectives, GAO surveyed 215 project 
sponsors and interviewed FTA officials, 15 project sponsors, and 
3 industry groups. Our survey response rate was 77 percent.	 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-07-812T					        
    ACCNO:   A69448						        
  TITLE:     Public Transportation: Preliminary Analysis of Changes to
and Trends in FTA's New Starts and Small Starts Programs	 
     DATE:   05/10/2007 
  SUBJECT:   Bus rapid transit					 
	     Economic development				 
	     Evaluation criteria				 
	     Light rail transit 				 
	     Mass transit					 
	     Mass transit funding				 
	     Procurement planning				 
	     Program evaluation 				 
	     Surveys						 
	     Transportation planning				 
	     Transportation policies				 
	     FTA New Starts Program				 
	     FTA Small Starts Program				 
	     FTA Very Small Starts Program			 

******************************************************************
** This file contains an ASCII representation of the text of a  **
** GAO Product.                                                 **
**                                                              **
** No attempt has been made to display graphic images, although **
** figure captions are reproduced.  Tables are included, but    **
** may not resemble those in the printed version.               **
**                                                              **
** Please see the PDF (Portable Document Format) file, when     **
** available, for a complete electronic file of the printed     **
** document's contents.                                         **
**                                                              **
******************************************************************
GAO-07-812T

   

     * [1]Background
     * [2]FTA Has Made Progress in Implementing SAFETEA-LU Changes, bu

          * [3]FTA Has Taken Steps to Implement SAFETEA-LU's Changes to the
          * [4]Work Remains in Implementing SAFETEA-LU Changes

               * [5]Project Sponsors Would Like FTA to Further Streamline the
                 Sm
               * [6]Project Sponsors Would Like FTA to Fully Incorporate the
                 Eco

     * [7]FTA Officials and Project Sponsors Attribute Changes in the

          * [8]The Number of Projects in the New Starts Pipeline Has Decrea

     * [9]FTA and Project Sponsors Attributed the Decrease in the New
     * [10]Future Demand for New Starts and Small Starts Programs Expec
     * [11]Contact Information
     * [12]GAO's Mission
     * [13]Obtaining Copies of GAO Reports and Testimony

          * [14]Order by Mail or Phone

     * [15]To Report Fraud, Waste, and Abuse in Federal Programs
     * [16]Congressional Relations
     * [17]Public Affairs

Before the Subcommittee on Highways and Transit, Committee on
Transportation and Infrastructure

United States Government Accountability Office

GAO

For Release on Delivery
Expected at 10:00 a.m. EDT
Thursday, May 10, 2007

PUBLIC TRANSPORTATION

Preliminary Analysis of Changes to and Trends in FTA's New Starts and
Small Starts Programs

Statement of Katherine Siggerud, Director
Physical Infrastructure

GAO-07-812T

Mr. Chairman and Members of the Subcommittee:

We appreciate the opportunity to provide testimony on the Federal Transit
Administration's (FTA) New Starts and Small Starts programs. As you know,
since the early 1970s, a significant portion of the federal government's
share of new capital investment in mass transportation has come through
the New Starts program. Through the New Starts program, FTA identifies and
recommends new fixed-guideway transit projects for funding--including
heavy, light, and commuter rail; ferry; and certain bus projects.^1 Over
the last decade, the New Starts program has provided state and local
agencies with over $10 billion to help design and construct transit
projects throughout the country.

More recently, the Safe, Accountable, Flexible, Efficient Transportation
Equity Act: A Legacy for Users (SAFETEA-LU) created, and FTA implemented,
what is commonly called the Small Starts program. This program is intended
to advance smaller-scale projects through an expedited and streamlined
evaluation and rating process. Small Starts projects are defined as those
with a total cost of less than $250 million, and which require less than
$75 million in funding from this program. FTA subsequently introduced a
new eligibility category within the Small Starts program called Very Small
Starts, which is for projects that have a total capital cost of less than
$50 million. Very Small Starts projects will qualify for an even simpler
and more expedited evaluation and rating process than Small Starts
projects. In July 2006, FTA issued interim guidance on the Small Starts
and Very Small Starts programs to govern the administration of the
programs until the final rule is issued. FTA expects the final rule to be
issued April 2008.

Although SAFETEA-LU made a number of changes to the New Starts program,
including the creation of the Small Starts program, it also maintained
many program requirements imposed by previous authorizing legislation. For
example, SAFETEA-LU, like the Transportation Equity Act for the 21st
Century, directs FTA to prioritize projects for funding by evaluating,
rating, and recommending potential projects on the basis of specific
financial commitment and project justification criteria--including
mobility improvements, cost-effectiveness, economic development, land use,
environmental benefits, and operating efficiencies. Using these
statutorily identified criteria, FTA evaluates potential projects annually
and as a condition for advancement into each phase of the process,
including preliminary engineering, final design, and construction. FTA
refers to projects in the preliminary engineering or final design phases
as the "pipeline" through which successful projects advance to receive
funding.

^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.

My testimony today examines (1) FTA's implementation of SAFETEA-LU changes
to the New Starts program, (2) the extent and nature of changes in the New
Starts pipeline since the fiscal year 2001 evaluation and rating cycle,^2
and factors that have contributed to trends in the program; and (3)
projected trends for the New Starts and Small Starts pipelines. My
comments are based on our ongoing work for the House Committee on
Transportation and Infrastructure and the Senate Committee on Banking,
Housing, and Urban Affairs as well as our body of work on the New Starts
program.^3 We plan to complete our ongoing work and report in full to the
Committees this summer. For our ongoing work, we surveyed all project
sponsors that are located in urbanized areas with populations over 200,000
and that have an annual ridership of over 1 million.^4 In total, we
surveyed 215 project sponsors, asking them about their past experiences
with the New Starts program and plans to apply to the program in the
future. Of the 215 project sponsors, 166 project sponsors responded to the
survey--for a survey response rate of 77 percent. We also interviewed 15
project sponsors, including all 10 sponsors who applied for the Small
Starts and Very Small Starts programs for the fiscal year 2008 evaluation
cycle. The other 5 project sponsors were selected on the basis of their
agencies' experience with the New Starts process, size, and location. In
addition, we interviewed FTA officials and representatives from industry
associations. We also reviewed FTA's guidance on the New Starts and Small
Starts programs, the Advanced Notice of Proposed Rule Making (ANPRM) for
Small Starts, and the provisions of SAFETEA-LU and of its predecessor, the
Transportation Equity Act for the 21st Century (TEA-21), that address the
New Starts program. We conducted our work from November 2006 through April
2007 in accordance with generally accepted government auditing standards.

^2The fiscal year 2001 evaluation cycle began in 1999--applications were
due in August 1999, and FTA evaluated the applications in the fall of
1999. The annual report was published in the spring of 2000 and included
funding recommendations for fiscal year 2001.

^3TEA-21 required GAO to report 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. SAFETEA-LU
continued this requirement. See the Related GAO Products at the end of
this testimony for a listing of previous reports on these programs.

^4Project sponsors we surveyed may or may not have previously applied to
the New Starts or Small Starts program, but because of their size and
ridership, would be more likely to plan the types of transit projects that
would potentially qualify for New Starts funding. Project sponsors are
typically transit agencies, but may also include city transportation
offices and metropolitan planning organizations, among other entities. In
this report, project sponsors are current sponsors of transit projects as
well as past or potential sponsors of such projects.

Summary:

           o FTA has made progress in implementing SAFETEA-LU changes,
           including issuing guidance for the New Starts program and interim
           guidance for the Small Starts program. However, work remains in
           implementing these changes. Project sponsors frequently identified
           two key implementation issues: further streamlining the Small
           Starts program and fully incorporating economic development into
           the New Starts and Small Starts evaluation and rating process.
           According to our analysis of the number and types of requirements
           for the New Starts and Small Starts application processes, the
           Small Starts process has fewer requirements. However, project
           sponsors said that despite the fewer requirements, FTA should
           further streamline the Small Starts application process. For
           example, project sponsors suggested eliminating requests for
           duplicate information requested in required worksheets. In
           addition, project sponsors noted that FTA has not fully
           incorporated economic development--a new project justification
           evaluation criterion identified by SAFETEA-LU--into the New Starts
           and Small Starts evaluation and rating processes. Specifically,
           FTA currently assigns a weight of 50 percent each to
           cost-effectiveness and land use in calculating a project's overall
           rating, but does not assign a weight to the other four statutorily
           identified criteria, including economic development. FTA officials
           noted that they do not weight economic development given the
           difficulties they have experienced in developing measures that
           both accurately quantifies the benefits and distinguishes
           competing projects. However, we previously reported that FTA's
           reliance on two evaluation criteria to calculate a project's
           overall rating is drifting away from the multiple-measure
           evaluation and rating process outlined in statute. In addition,
           without a weight for economic development, project sponsors say,
           the evaluation and rating process does not reflect an important
           benefit of certain projects. FTA officials told us that they
           understand the importance of economic development to the transit
           community and the concerns raised by project sponsors, and said
           they are currently working to develop an appropriate economic
           development measure. FTA stated that these issues would be
           addressed as part of its upcoming rulemaking process.
           o The New Starts pipeline has changed in size and composition
           since the fiscal year 2001 evaluation and rating cycle, and a
           variety of factors have contributed to these changes. Since the
           fiscal year 2001 evaluation and rating cycle, the number of
           projects in the New Starts pipeline has decreased by more than
           half. In addition, the types of projects in the pipeline have
           changed, as bus rapid transit projects are now more common than
           commuter or light rail projects, although they still represent a
           small amount of the total cost for all projects in the pipeline.
           FTA officials and project sponsors offered different reasons for
           the decrease in the New Starts pipeline. FTA officials said that
           they had increased their scrutiny of applications to help ensure
           that only the strongest projects enter the pipeline. According to
           these officials, they took steps to remove projects from the
           pipeline that were not advancing or that did not adequately
           address identified problems--although the officials noted that
           most project sponsors voluntarily withdrew projects from the
           pipeline rather than having FTA remove them. Project sponsors we
           interviewed provided other reasons for the decrease in the New
           Starts pipeline. In particular, they maintained that the New
           Starts process is too complex, time-consuming, and costly. Our
           survey results confirm some of the reasons offered by project
           sponsors. Among the project sponsors we surveyed with completed
           transit projects, the most common reasons given for not applying
           to the New Starts program was that the process is too lengthy or
           that the sponsor wanted to move the project along faster than
           could be done in the New Starts process. About two-thirds of these
           project sponsors reported that their most recent project was
           eligible for the New Starts program, yet more than one-fourth of
           them did not apply to the program.^5 The lengthy nature of the New
           Starts process is due, at least in part, to the rigorous and
           systematic evaluation and rating process established by law--which
           we have previously noted could serve as a model for other
           transportation programs. FTA has recognized that the process can
           be lengthy and in 2006, FTA commissioned a study to examine, among
           other issues, opportunities for accelerating and simplifying the
           process for implementing the New Starts program. FTA is currently
           reviewing the study's findings and recommendations.
           o Despite these concerns, our survey of project sponsors indicates
           that there will be a future demand for New Starts, Small Starts,
           and Very Small Starts funding. The project sponsors we surveyed
           reported having 137 planned projects--that is, projects currently
           undergoing an alternative analysis or other corridor-based
           planning study.^6 According to the project sponsors, they plan to
           seek New Starts, Small Starts, or Very Small Starts funding for
           almost three-fourths (73 percent) of these 137 projects. Project
           sponsors we surveyed also indicated that they were considering a
           range of project type alternatives in their planning. The most
           commonly cited alternatives were bus rapid transit and light rail.
           Our survey results also indicate that, through its Small Starts
           and Very Small Starts programs, FTA is attracting project sponsors
           that would not otherwise apply for the New Starts program or have
           not previously applied to the New Starts program. For example, of
           28 project sponsors that intend to seek Small Starts or Very Small
           Starts funding for their planned projects, 13 have not previously
           applied for New Starts, Small Starts, or Very Small Starts
           funding.^7

^5Of the 54 project sponsors with a completed transit project, 35 reported
that their most recently completed project was eligible for New Starts
funding. Of those 35 sponsors, 10 did not apply to the program.

^6Alternatives analysis (also known as major investment study or
multimodal corridor analysis) is conducted to evaluate a range of
transportation alternatives (including appropriate modal and alignment
options) developed to address transportation problems and mobility needs
in a given corridor. The alternatives analysis study is intended to
provide information to local officials on the benefits, costs, and impacts
of alternative transportation investments developed to address the purpose
and need for an improvement in the corridor.

^7Thirty project sponsors that responded to our survey intend to seek
Small Starts or Very Small Starts funding for their planned projects,
however two of those sponsors did not answer whether they had previously
applied for New Starts, Small Starts, or Very Small Starts funding.

           Background

           SAFETEA-LU authorized over $45 billion for federal transit
           programs, including $8 billion for the New Starts program, from
           fiscal year 2005 through fiscal year 2009. Under New Starts, FTA
           identifies and recommends fixed-guideway transit projects for
           funding--including heavy, light, and commuter rail; ferry; and
           certain bus projects (such as bus rapid transit). 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. FFGAs 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). 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 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, the project
           sponsor submits an application to FTA for the project to enter the
           preliminary engineering phase.^8 When this phase is completed and
           federal environmental requirements are satisfied, FTA may approve
           the project's advancement into final design,^9 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 through construction
           phases and evaluates the projects for advancement into each phase
           of the process, as well as annually for the New Starts report to
           Congress.
		   
^8During 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 the
preliminary engineering phases. Some federal New Starts funding is
available to projects for preliminary engineering activities, if so
appropriated by Congress.

^9Final 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 statutorily defined evaluation
           criteria--including both financial commitment and project
           justification criteria--and then assigns an overall rating.^10
           These evaluation 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. 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.
           Projects are rated at several points during the New Starts
           process--as part of the evaluation for entry into the preliminary
           engineering and final design phases, and yearly for inclusion in
           the New Starts annual report.

           As required by statute, the administration uses the FTA evaluation
           and rating process, along with the phase of development of New
           Starts projects, to decide which projects to recommend to Congress
           for funding.^11 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 the
           following conditions during the fiscal year for which funding is
           proposed:

^10The exceptions to the evaluation process are statutorily "exempt"
projects, which are those with requests for less than $25 million in New
Starts funding. Sponsors of these projects are not required to submit
project justification information (although FTA encourages their sponsors
to do so). FTA does not rate these projects and the projects are not
eligible for FFGAs. As a result, the number of projects in the preliminary
engineering or final design phases may be greater than the number of
projects evaluated and rated by FTA. Exempt projects will continue to be
eligible for funding without being rated until the final rule for Small
Starts is issued.

^11The 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-federal project 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 (i.e., environmental or financial) are minimized.
           o The project must meet FTA's tests for readiness and technical
           capacity, which confirm that there are no remaining cost, project
           scope, or local financial commitment issues.
		   
		   FTA Has Made Progress in Implementing SAFETEA-LU Changes, but Work
		   Remains

           SAFETEA-LU made a number of changes to the New Starts program and
           FTA has made progress in implementing some of those changes.
           However, FTA has more work to do to implement these changes. In
           particular, although the Small Starts program has fewer
           application and document submission requirements than the New
           Starts program, project sponsors have expressed concern that the
           Small Starts program could be further streamlined. In addition,
           SAFETEA-LU added economic development to the list of evaluation
           criteria, but FTA has not fully incorporated this criterion into
           the New Starts and Small Starts evaluation and rating processes.
		   
		   FTA Has Taken Steps to Implement SAFETEA-LU's Changes to the New
		   Starts Program

           SAFETEA-LU introduced a number of changes to the New Starts
           program. For example, SAFETEA-LU added economic development to the
           list of evaluation criteria that FTA must use in evaluating and
           rating New Starts projects and required FTA to issue notice and
           guidance each time significant changes are made to the program. In
           addition, SAFETEA-LU established the Small Starts program, a new
           capital investment grant program to provide funding for lower-cost
           fixed- and non-fixed-guideway projects such as bus rapid transit,
           streetcars, and commuter rail projects. This program is intended
           to advance smaller-scale projects through an expedited and
           streamlined evaluation and rating process. Small Starts projects
           are defined as those that require less than $75 million in federal
           funding and have a total cost of less than $250 million. According
           to FTA's guidance, Small Starts projects must (a) meet the
           definition of a fixed guideway for at least 50 percent of the
           project length in the peak period^12 or (b) be a corridor-based
           bus project with the following minimum elements:

           o substantial transit stations,
           o traffic signal priority/pre-emption, to the extent, if any, that
           there are traffic signals on the corridor,
           o low-floor vehicles or level boarding,
           o branding of the proposed service, and
           o 10 minute peak/12 minute off-peak running times (i.e., headways)
           or better while operating at least 14 hours per weekday.

           FTA has made progress in implementing SAFETEA-LU changes. For
           example, it published the New Starts policy guidance in January
           2006 and February 2007, and interim guidance on the Small Starts
           program in July 2006. The July 2006 interim guidance introduced a
           separate eligibility category within the Small Starts program for
           "Very Small Starts" projects. Small Starts projects that qualify
           as Very Small Starts are simple, low-cost projects that FTA has
           determined qualify for a simplified evaluation and rating process.
           These projects must meet the same eligibility requirements as
           Small Starts projects and be located in corridors with more than
           3,000 existing riders per average weekday who will benefit from
           the proposed project. In addition, the projects must have a total
           capital cost less than $50 million (for all project elements) and
           a per-mile cost of less than $3 million, excluding rolling stock
           (e.g., train cars). Table 1 describes SAFETEA-LU provisions for
           the New Starts program and the status of the implementation of
           those provisions as of April 2007.
		   
^12The fixed guideway portion need not be contiguous, but should be
located to result in faster and more reliable running times.

Table 1: Implementation of SAFETEA-LU's New Starts Provisions, as of April
2007

SAFETEA-LU                                Status           of Remaining    
provisions          Description           implementation      action(s)    
Establish the Small Projects seeking less FTA issued the      Rulemaking   
Starts program      than $25 million in   final interim       needed to    
                       New Starts funds will guidance for July   establish    
                       no longer be exempt   2006. By law,       Small Starts 
                       from the ratings      exempt projects     program.     
                       process once the      will continue to be              
                       Small Starts rule is  eligible for                     
                       finalized.            funding without                  
                                             being rated until                
                       A new capital         the final rule for               
                       investment program    Small Starts is                  
                       called Small Starts   issued.                          
                       provides funding 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.                                               
Document the        Project sponsors with FTA's May 2006      Rulemaking   
before-and-after    FFGAs must conduct a  policy guidance     needed to    
study requirement   study that (1)        requires that       establish    
                       describes and         project sponsors    requirement. 
                       analyzes the impacts  document the                     
                       of the new fixed      information                      
                       guideway capital      produced during the              
                       project on transit    planning phase that              
                       services and transit  will be needed for               
                       ridership, (2)        the                              
                       evaluates the         before-and-after                 
                       consistency of        study and update                 
                       predicted and actual  the information and              
                       project               analysis before                  
                       characteristics and   entering final                   
                       performance, and (3)  design.                          
                       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.                                              
Require FTA to      New Starts policy     FTA has since       None.        
publish policy      guidance must be      published its New                
guidance            published for notice  Starts policy                    
                       and comment no later  guidance for notice              
                       than 120 days after   and comment each                 
                       the enactment of      time significant                 
                       SAFETEA-LU, each time changes have been                
                       significant changes   made, such as for                
                       are made, and at      its draft New                    
                       least every 2 years.  Starts policy                    
                                             guidance in January              
                                             2006 and February                
                                             2007, and its final              
                                             New Starts policy                
                                             guidance in May                  
                                             2006.                            
Revise New Starts   The overall project   FTA used a 3        Issue final  
overall project     rating is based on a  point-scale project guidance on  
rating scale        5-point scale of      rating scale for    implementing 
                       "high,"               the fiscal year     the 5-point  
                       "medium-high,"        2007 and 2008       scale in May 
                       "medium,"             evaluation and      2007.        
                       "medium-low," and     rating cycles, but               
                       "low." Projects are   changed ratings to               
                       required to receive   "high," "medium,"                
                       an overall rating of  and "low." FTA's                 
                       "medium" or higher to February 2007                    
                       be recommended for    policy guidance                  
                       funding.              proposed                         
                                             implementing the                 
                                             5-point scale                    
                                             starting in May                  
                                             2007.                            
Identify            The Secretary is      FTA's January 2006  Rulemaking   
reliability of cost required to analyze,  policy guidance for needed to    
estimate and        evaluate, and         New Starts and      establish    
ridership forecast  consider the          advanced notice of  requirement. 
as a consideration  reliability of the    proposed rulemaking              
in evaluation       forecasting methods   for Small Starts                 
process             used by New Starts    proposed an                      
                       project sponsors and  approach for                     
                       their contractors to  incorporating                    
                       estimate costs and    reliability into                 
                       ridership.            project                          
                                             evaluations.                     
Add economic        Projects will be      FTA considers       Rulemaking   
development         evaluated based on a  economic            needed to    
criterion to        review of their       development as an   solicit      
evaluation process  effects on local      unweighted "other   comment on   
                       economic development. factor" criterion   and finalize 
                                             in the evaluation   measures for 
                                             process. FTA has    economic     
                                             sought comment from development. 
                                             various parties on               
                                             appropriate                      
                                             measures for                     
                                             economic                         
                                             development.                     
Identify land use   Projects will be      FTA considers land  None.        
as a specific       evaluated based on a  use as a weighted                
evaluation          review of their       criterion in the                 
criterion           public transportation evaluation process.              
                       supportive land use                                    
                       policies and future                                    
                       patterns.                                              
Clarify nonfederal  The Secretary is not  In its reporting    None.        
financial           authorized to require instructions for                 
commitment          a nonfederal          New Starts issued                
                       financial commitment  in May 2006, FTA                 
                       for a project that is clarified that a                 
                       more than 20 percent  nonfederal                       
                       of its net capital    commitment of more               
                       cost.                 than 20 percent of               
                                             the project's net                
                                             capital cost is not              
                                             required, although               
                                             a greater                        
                                             nonfederal                       
                                             commitment is                    
                                             encouraged.                      
Establish           A higher share of New FTA implemented     None.        
incentives for      Starts funding may be that a higher share              
accurate cost and   made available to     of New Starts                    
ridership forecasts project sponsors if   funding may be made              
                       project's cost is not available to                     
                       more than 10 percent  project sponsors if              
                       higher and ridership  the project cost                 
                       is not less than 90   and ridership                    
                       percent of those      estimates are                    
                       estimates when        within 10 percent                
                       project was approved  of the original                  
                       for preliminary       estimates in its                 
                       engineering.          fiscal years 2007                
                                             and 2008 evaluation              
                                             cycle.                           
Assess contractors' The Secretary will    FTA submitted an    None.        
performance         submit an annual      annual report to                 
                       report to             congressional                    
                       congressional         committees in                    
                       committees analyzing  August 2006 that                 
                       the consistency and   described how FTA                
                       accuracy of the cost  intends to analyze               
                       and ridership         the consistency and              
                       estimates made by     accuracy of the                  
                       contractors to public costs and ridership              
                       transportation        estimates made by                
                       agencies developing   contractors to                   
                       new capital projects. public                           
                                             transportation                   
                                             agencies developing              
                                             new capital                      
                                             projects.                        

Source: GAO analysis of SAFETEA-LU and FTA data.

Work Remains in Implementing SAFETEA-LU Changes

Although FTA has made progress in implementing SAFETEA-LU changes, more
work remains. Project sponsors identified two key issues for FTA to
consider as it moves forward in implementing SAFETEA-LU changes: further
streamline the Small Starts program and fully incorporate economic
development into the New Starts and Small Starts evaluation and rating
processes. FTA officials agree that the Small Starts program can be
further streamlined. Further, FTA officials said they understand the
importance of economic development, and are currently working to develop
an appropriate economic development measure.

  Project Sponsors Would Like FTA to Further Streamline the Small Starts Program

In implementing the Small Starts program, FTA has taken steps to
streamline the application and evaluation and rating process for
smaller-scale transit projects, as envisioned by SAFETEA-LU. According to
our analysis of the number and types of requirements for the New Starts
and Small Starts application processes, the Small Starts process has fewer
requirements. For example, in the categories of travel forecasting,
project justification, and local financial commitment, the requirements
were reduced. In addition, FTA developed simplified methods for travel
forecasts that predict transportation benefits and reduced the number of
documents that need to be submitted as part of the Small Starts
application process. For example, the number of documents required for the
Small Starts application is one-quarter fewer than those for the New
Starts program. Furthermore, FTA established the Very Small Starts
program, which has even fewer application and document submission
requirements than the Small Starts program.

Despite these efforts, many of the project sponsors we interviewed find
the Small Starts application process time consuming and costly to
complete, and would like to see FTA further streamline the process.
Frequently, project sponsors said that the current Small Starts
application process takes as long and costs as much to complete as the New
Starts application process, even though the planned projects cost less.
For example, a project sponsor who applied for the Small Starts program
told us that FTA asks its applicants to submit templates used in the New
Starts application process that call for information not relevant for a
Small Starts project. For example, while project sponsors are only
required to submit an opening year travel forecast as part of their Small
Starts application, the template FTA provides project sponsors asks for
information on additional forecasting years. The project sponsor suggested
that FTA develop a separate set of templates for the Small Starts program
that would ask only for Small Starts-related information. FTA officials
told us that in these cases, they would not expect project sponsors to
provide the additional information that is not required. Another project
sponsor we interviewed told us that although FTA tried to streamline the
process by requiring ridership projections only for the opening year of
Small Starts projects, the environmental impact statement still mandates
the development of multi-year ridership projections.^13 Such extensive
ridership projections take a considerable amount of work, staff time, and
funding to produce. Several other project sponsors who applied to the
Small Starts or Very Small Starts programs expressed additional concerns
about having to provide duplicate information, such as project finance and
capital cost data that can be found in other required worksheets. FTA
officials do not believe that such duplicate information is burdensome for
projects sponsors to submit. However, because some of the project sponsors
are smaller-sized entities and have no previous experience with the New
Starts program, the concerns expressed by project sponsors likely reflect
their inexperience and lack of in-house expertise and resources.

In reviewing the Small Starts application process requirements, we also
found that the application is not, in some cases, tailored for Small
Starts applicants and, in several instances, requests duplicate
information. FTA officials acknowledged that the Small Starts application
process could be further streamlined and are working to reduce the burden,
such as minimizing the duplicate information project sponsors are
currently required to submit. However, FTA officials noted that some
requirements are statutorily-defined or reflect industry-established
planning principles. For example, SAFETEA-LU requires that projects, even
Small Starts projects, emerge from an alternatives analysis that
considered various options to address the transportation problem at hand.
Therefore, only certain aspects of the process can or should be
streamlined.

^13FTA officials clarified that the level of ridership projections
required is dependent on the nature of the project.

  Project Sponsors Would Like FTA to Fully Incorporate the Economic Development
  Criterion into the Evaluation Process

Project sponsors also noted that FTA has not fully incorporated economic
development--a new project justification evaluation criterion identified
by SAFETEA-LU--into the evaluation process. Specifically, FTA currently
assigns a weight of 50 percent each to cost-effectiveness and land use to
calculate a project's overall rating; the other four
statutorily-identified criteria, including economic development, mobility
improvements, operating efficiencies, and environmental benefits, are not
weighted. To reflect SAFETEA-LU's increased emphasis on economic
development, FTA has encouraged project sponsors to submit information
that they believe demonstrates the impacts of their proposed transit
investments on economic development. According to FTA, this information is
considered as an "other factor" in the evaluation process, but not
weighted. However, FTA officials told us that few project sponsors submit
information on their projects' economic development benefits for
consideration as an "other factor." We previously reported that FTA's
reliance on two evaluation criteria to calculate a project's overall
rating is drifting away from the multiple-measure evaluation and rating
process outlined in statute and current New Starts regulations.^14 Thus,
we recommended that FTA improve the measures used to evaluate New Starts
projects so that all of the statutorily-defined criteria can be used in
determining a project's overall rating, or provide a crosswalk in the
regulations showing clear linkages between the criteria outlined in
statute and the criteria and measures used in the evaluation and rating
process in the upcoming rulemaking process.

Many of the project sponsors and all industry groups we interviewed also
stated that certain types of projects are penalized in the evaluation and
rating process because of the weights assigned to the different evaluation
criteria. Specifically, by not weighting economic development, the project
sponsors and industry groups said that the evaluation and rating process
does not consider an important benefit of some transit projects. They also
expressed concern that the measure FTA uses to determine
cost-effectiveness does not adequately capture the benefits of certain
types of fixed guideway projects--such as streetcars--that have shorter
systems and provide enhanced access to a dense urban core rather than
transport commuters from longer distances (like light or heavy rail).
Project sponsors and an industry group we interviewed further noted that
FTA's cost effectiveness measure has influenced some project sponsors to
change their project designs from more traditional fixed-guideway systems
like light rail or streetcars to bus rapid transit, expressly to receive a
more favorable cost-effectiveness rating from FTA.

^14GAO, Public Transportation: Opportunities Exist to Improve the
Communication and Transparency of Changes Made to the New Starts Program,
[18]GAO-05-674  (Washington, D.C.: June 28, 2005).

According to FTA officials, they understand the importance of economic
development to the transit community and the concerns raised by project
sponsors, and said they are currently working to develop an appropriate
economic development measure. FTA is currently soliciting input from
industry groups on how to measure economic development, studying possible
options, and is planning to describe how it will incorporate economic
development into the evaluation criteria in its upcoming rulemaking. FTA
officials also stated that incorporating economic development into the
evaluation process prior to the issuance of a regulation would have the
potential of creating significant evaluation and rating uncertainty for
project sponsors. Furthermore, they agreed with our previous
recommendation that this issue should be addressed as part of their
upcoming rulemaking, which they expect to be completed in April 2008.

FTA officials noted that they have had difficulty developing an economic
development measure that both accurately measures benefits and
distinguishes competing projects. For example, FTA officials said that
separating economic development benefits from land use benefits--another
New Starts evaluation criterion--is difficult. 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, raising questions about the usefulness of
these benefits for a national comparison of projects.^15 We have also
reported on many of the same challenges of measuring and forecasting
indirect benefits, such as economic development and land use impacts.^16
For example, we noted that certain benefits are often double counted when
evaluating transportation projects. We also noted that 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 indirect benefits to direct benefits
could constitute double counting and lead to overestimating a project's
benefits. Despite these challenges, we have previously reported that it is
important to consider economic development and land use impacts, since
they often drive local transportation investment choices.^17

15Indirect benefits, such 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.

FTA Officials and Project Sponsors Attribute Changes in the Size and Composition
of the New Starts Pipeline to Different Factors

The number of projects in the New Starts pipeline has decreased since the
fiscal year 2001 evaluation and rating cycle, and the types of projects in
the pipeline have changed. FTA and project sponsors ascribed these changes
to different factors, with FTA officials citing their increased scrutiny
of applications and projects, and the project sponsors pointing to the
complex, time-consuming, and costly nature of the New Starts process. FTA
is considering different ideas on how to improve the New Starts process,
some of which may address the concerns identified by project sponsors.

The Number of Projects in the New Starts Pipeline Has Decreased, and the Types
of Projects Have Changed

Since the fiscal year 2001 evaluation cycle, the number of projects in the
New Starts pipeline--which includes projects that are in the preliminary
engineering or final design phases--has decreased by more than half, from
48 projects in the fiscal year 2001 evaluation cycle to 19 projects in the
fiscal year 2008 evaluation cycle. Similarly, the number of projects FTA
has evaluated, rated, and recommended for New Starts FFGAs has decreased
since the fiscal year 2001 evaluation and rating cycle. Specifically, as
shown in table 2, the number of projects that FTA evaluated and rated
decreased by about two-thirds, from 41 projects to 14 projects.

^16GAO, Highway and Transit Investments, Options for Improving Information
on Projects' Benefits and Costs and Increasing Accountability for Results,
[19]GAO-05-172  (Washington, D.C.: Jan. 24, 2005).

^17 [20]GAO-05-172 .

Table 2: Number of Projects in the Pipeline, Evaluated and Rated Projects,
by Fiscal Year

               Number of projects in the     Number of projects evaluated and 
Fiscal year                pipeline^a                              rated^b 
2001                               48                                   41 
2002                               40                                   26 
2003                               43                                   25 
2004                               52                                   27 
2005                               37                                   23 
2006                               30                                   18 
2007                               22                                   18 
2008                               19                                   14 

Source: GAO analysis of FTA data.

^aIncludes projects that were evaluated and rated for the fiscal year
evaluation cycle, as well as "exempt" projects.

^bIncludes projects in final design and preliminary engineering, both
recommended and not recommended, but does not include "exempt" projects
and those categorized by FTA as "not rated."

The composition of the pipeline--that is, the types of projects in the
pipeline--has also changed since the fiscal year 2001 evaluation cycle.
During fiscal years 2001 through 2007, light rail and commuter rail were
the more prevalent modes for projects in the pipeline. In fiscal year
2008, bus rapid transit became the most common transit mode for projects
in the pipeline. Overall, heavy rail has become a less common mode for
projects in the pipeline since fiscal year 2001 (see fig. 2). The increase
in bus rapid transit projects is likely due to a number of factors,
including SAFETEA-LU's expanded definition of fixed guideways and foreign
countries' positive experiences with this type of transit system. In
particular, SAFETEA-LU expanded the definition of fixed guideways for the
Small Starts program to include corridor-based bus projects. To be
eligible, a corridor-based bus project must (1) operate in a separate
right-of-way dedicated for public transit use for a substantial portion of
the project, or (2) represent a substantial investment in a defined
corridor.

Figure 2: Types of Projects in the New Starts Pipeline, by Fiscal Year

FTA and Project Sponsors Attributed the Decrease in the New Starts Pipeline to
Different Factors

FTA and project sponsors identified different reasons for the decrease in
the New Starts pipeline. FTA officials cited their increased scrutiny of
applications to help ensure that only the strongest projects enter the
pipeline, and said they had taken steps to remove projects from the
pipeline that were inactive, not advancing, or did not adequately address
identified problems. FTA officials told us that they believe projects had
been progressing too slowly through the pipeline in recent years and
therefore needed encouragement to move forward or be removed from the
pipeline. Along these lines, since fiscal year 2004, FTA has issued
warnings to project sponsors that alert them to specific project
deficiencies that must be corrected by a specified date in order for the
project to advance through the pipeline. If the deficiency is not
corrected, FTA removes the project from the pipeline. To date, FTA has
issued warnings for 13 projects. Three projects have only recently
received a warning and their status is to be determined; 3 projects have
adequately addressed the deficiency identified by FTA; 1 project was
removed by FTA for failing to address the identified deficiency; and 6
projects were withdrawn from the pipeline by the projects' sponsor. FTA
officials told us that project sponsors are generally aware of FTA's
efforts to better manage the pipeline.

Although FTA has taken steps to remove inactive or stalled projects from
the pipeline, FTA officials noted that most projects have been withdrawn
by their project sponsors, not FTA. According to FTA data, 23 projects
have been withdrawn from the New Starts pipeline between 2001 and 2007. Of
these, 16 were withdrawn at the request of the project sponsors, 6 were
removed in response to efforts initiated by FTA, and 1 was removed at
congressional direction (see fig. 3).^18 Of the projects that were
withdrawn by project sponsors, the most common reasons were that the
projects were either reconfigured (the project scope or design was
significantly changed) or reconsidered, or that the local financial
commitment was not demonstrated. Similarly, FTA initiated the removal of 4
of the 6 projects for lack of a local financial commitment, often
demonstrated by a failed referendum at the local level. Of the 23 projects
withdrawn from the New Starts pipeline, 3 were expected to reenter the
pipeline at a later date.

^18The 16 projects withdrawn by project sponsors and the 6 projects
withdrawn by FTA include the 7 projects that received a warning and were
subsequently withdrawn from the pipeline by project sponsors or FTA.

Figure 3: Number of Projects Withdrawn or Removed from the New Starts
Pipeline Since 2001

The project sponsors we interviewed provided other reasons for the
decrease in the number of projects in the New Starts pipeline. The most
common reasons cited by project sponsors are that the New Starts process
is too complex, costly, and time-consuming:

           o Complexity and cost of the New Starts process: The majority of
           project sponsors we interviewed told us that the complexity of the
           requirements, including those for financial commitment projections
           and travel forecasts--which require extensive analysis and
           economic modeling--create disincentives to entering the New Starts
           pipeline. Sponsors also told us that the expense involved in
           fulfilling the application requirements, including the costs of
           hiring additional staff and private grant consultants, discourages
           some project sponsors with fewer resources from applying for New
           Starts funding.
           o Time required to complete the New Starts process: More than half
           of the project sponsors we interviewed said that the application
           process is too time-consuming or leads to project delays. One
           project sponsor we interviewed told us that constructing a project
           with New Starts funding (as opposed to without) delays the time
           line for the project by as much as several years, which in turn
           leads to increased project costs as inflation and expenses from
           labor and materials increase with the delay. The lengthy nature of
           the New Starts process is due, at least in part, to the rigorous
           and systematic evaluation and rating process established by
           law--which we have previously noted could serve as a model for
           other transportation programs. In addition, FTA officials noted
           that most project delays are caused by the project sponsor, not
           FTA. Other reasons cited by project sponsors for the decrease in
           the pipeline include that project sponsors are finding other ways
           to fund projects, such as using other federal funds or seeking
           state, local, or private funding. One project sponsor remarked
           that sponsors try to avoid the New Starts process by obtaining a
           congressional designation, so that they can skip the cumbersome
           New Starts application process and construct their project faster.
           In addition, three other project sponsors we interviewed said that
           since the New Starts process is well-established and outcomes are
           predictable, many potential project sponsors do not even enter the
           pipeline because they realize their projects are unlikely to
           receive New Starts funding.

           Our survey results also reflect many of the reasons for the
           decline in the New Starts pipeline. Among the project sponsors we
           surveyed with completed transit projects, the most common reasons
           given for not applying to the New Starts program were that the
           process is too lengthy or that the sponsor wanted to move the
           project along faster than could be done in the New Starts process.
           About two-thirds of these project sponsors reported that their
           most recent project was eligible for New Starts, yet more than
           one-fourth of them did not apply to the program  .^19 Instead,
           these project sponsors reported using other federal funding and
           state, local, and private funding--with other federal and local
           funding being the most commonly used and private funding least
           commonly used--to fund their most recently completed project.
           Further, we also found that two-thirds of the large project
           sponsors we surveyed applied to the New Starts program for its
           most recently completed project while only about one-third of
           medium and smaller project sponsors did.^20 Other reasons these
           project sponsors cited for not applying include sufficient funding
           from other sources to complete the project, concern about
           jeopardizing other projects submitted for New Starts funding, and
           difficulty understanding and completing the process and the
           program's eligibility requirements.
		   
^19Of the 54 project sponsors with a completed transit project, 35
reported that their most recently completed project was eligible for New
Starts funding. Of those 35 sponsors, 10 did not apply to the program.

^20For the purposes of our survey, we defined small project sponsors as
those with an annual ridership of less than 10 million; medium project
sponsors with an annual ridership of between 10 and 50 million, inclusive;
and large project sponsors with an annual ridership of more than 50
million trips.

           FTA is considering and implementing different ideas on how to
           improve the New Starts process--many of which would address the
           concerns identified by project sponsors. For example, FTA has
           recognized that the process can be lengthy and in 2006, FTA
           commissioned a study to examine, among other issues, opportunities
           for accelerating and simplifying the process for implementing the
           New Starts program. According to FTA officials, one of the study's
           recommendations was to implement project development agreements to
           solidify New Starts project schedules and improve FTA's timeline
           for reviews. FTA officials told us that they are implementing this
           recommendation, and have already implemented project schedules for
           three New Starts projects in the pipeline. In addition, in
           February 2007, FTA proposed the elimination of a number of
           reporting requirements. FTA's Administrator stated that FTA will
           continue to look for ways to further improve the program.
		   
           Future Demand for New Starts and Small Starts Programs Expected

           Our survey of project sponsors indicates that there will be a
           future demand for New Starts, Small Starts, and Very Small Starts
           funding. About forty-five percent (75 of 166) of the project
           sponsors we surveyed reported that they had a total of 137 planned
           transit projects, which we defined as those currently undergoing
           an alternatives analysis or other corridor-based planning study.
           According to the project sponsors, they anticipate seeking New
           Starts, Small Starts, or Very Small Starts funding for 100 of
           these 137 planned projects. More specifically, they anticipate
           seeking New Starts funding for 57 of the planned projects; Small
           Starts funding for 29 of the planned projects; and Very Small
           Starts funding for 14 of the planned projects (see fig 4).^21
           Although the project sponsors we surveyed indicated that they were
           considering a range of project type alternatives in their
           planning, the most commonly cited alternatives were bus rapid
           transit and light rail.
		   
^21For the remaining 37 planned transit projects, respondents either said
they were not planning on applying for New Starts, Small Starts, or Very
Small Starts funding, or they did not know whether they planned to apply.

           Figure 4: Project Sponsors Use of New Starts, Small Starts, and
           Very Small Starts for Planned Projects

           Note: "Other" refers to project sponsors we surveyed who selected
           "None of the above" in response to the type of federal funding, if
           any, that they are likely to request for their planned project(s).

           All of the Small Starts and Very Small Starts project sponsors we
           interviewed view the new Small Starts and Very Small Starts
           programs favorably. These project sponsors told us that they
           appreciate the emphasis FTA has placed on smaller transit projects
           through its new programs and the steps FTA has taken to streamline
           the application process for the programs. The project sponsors
           also told us that the Small Starts and Very Small Starts programs
           address a critical and unmet funding need, and that they believe
           their projects will be more competitive under these programs then
           under the New Starts program because they are vying for funding
           with projects and agencies of similar size. FTA told us that they
           have been responsive in providing assistance on the program when
           contacted.

           Our survey results also indicate that, through its Small Starts
           and Very Small Starts programs, FTA is attracting project sponsors
           that would not have otherwise applied for the New Starts program
           or have not previously applied to the New Starts program. For
           example, project sponsors indicated that they would not have
           applied for New Starts funding for 14 of the 18 Small Starts and
           Very Small Starts projects identified in our survey, if the Small
           Starts and Very Small Starts programs had not been established. In
           addition, of 28 project sponsors that intend to seek Small Starts
           or Very Small Starts funding for their planned projects, 13 have
           not previously applied for New Starts, Small Starts, or Very Small
           Starts funding.^22
		   
^22Thirty project sponsors that responded to our survey intend to seek
Small Starts or Very Small Starts funding for their planned projects,
however two of those sponsors did not answer whether they had previously
applied for New Starts, Small Starts, or Very Small Starts funding.

           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
           Nikki Clowers, Assistant Director; Elizabeth Eisenstadt; Carol
           Henn; Bert Japikse; Amanda Miller; SaraAnn Moessbauer; Nitin Rao;
           Tina Won Sherman; Bethany Claus Widick; and Elizabeth Wood.
		   
		   Related GAO Products

           Public Transportation: New Starts Program Is in a Period of
           Transition. [22]GAO-06-819. Washington, D.C.: August 30, 2006.

           Public Transportation: Preliminary Information on FTA's
           Implementation of SAFETEA-LU Changes. [23]GAO-06-910T. Washington,
           D.C.: June 27, 2006.

           Public Transportation: Opportunities Exist to Improve the
           Communication and Transparency of Changes Made to the New Starts
           Program. [24]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. [25]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.
           [26]GAO-03-701 . Washington, D.C.: June 23, 2003.

           Mass Transit: Status of New Starts Program and Potential for Bus
           Rapid Transit Projects. [27]GAO-02-840T . Washington, D.C.: June
           20, 2002.

           Mass Transit: FTA's New Starts Commitments for Fiscal Year 2003.
           [28]GAO-02-603 . Washington, D.C.: April 30, 2002.

           Mass Transit: FTA Could Relieve New Starts Program Funding
           Constraints. [29]GAO-01-987 . Washington, D.C.: August 15, 2001.

           Mass Transit: Implementation of FTA's New Starts Evaluation
           Process and FY 2001 Funding Proposals. [30]GAO/RCED-00-149 .
           Washington, D.C.: April 28, 2000.

           Mass Transit: Status of New Starts Transit Projects With Full
           Funding Grant Agreements. [31]GAO/RCED-99-240 . Washington, D.C.:
           August 19, 1999.

           Mass Transit: FTA's Progress in Developing and Implementing a New
           Starts Evaluation Process. [32]GAO/RCED-99-113 . Washington, D.C.:
           April 26, 1999.
		   
		   GAO's Mission

           The Government Accountability Office, the audit, evaluation and
           investigative arm of Congress, exists to support Congress in
           meeting its constitutional responsibilities and to help improve
           the performance and accountability of the federal government for
           the American people. GAO examines the use of public funds;
           evaluates federal programs and policies; and provides analyses,
           recommendations, and other assistance to help Congress make
           informed oversight, policy, and funding decisions. GAO's
           commitment to good government is reflected in its core values of
           accountability, integrity, and reliability.		   
		   
           Obtaining Copies of GAO Reports and Testimony

           The fastest and easiest way to obtain copies of GAO documents at
           no cost is through GAO's Web site ( www.gao.gov ). Each
           weekday, GAO posts newly released reports, testimony, and
           correspondence on its Web site. To have GAO e-mail you a list of
           newly posted products every afternoon, go to www.gao.gov and
           select "Subscribe to Updates."
		   
		   Order by Mail or Phone

           The first copy of each printed report is free. Additional copies
           are $2 each. A check or money order should be made out to the
           Superintendent of Documents. GAO also accepts VISA and Mastercard.
           Orders for 100 or more copies mailed to a single address are
           discounted 25 percent. Orders should be sent to:

           U.S. Government Accountability Office 441 G Street NW, Room LM
           Washington, D.C. 20548

           To order by Phone: Voice: (202) 512-6000
		   TDD: (202) 512-2537
		   Fax: (202) 512-6061
		   
		   To Report Fraud, Waste, and Abuse in Federal Programs

           Contact:

           Web site: www.gao.gov/fraudnet/fraudnet.htm 
		   E-mail: [email protected]
		   Automated answering system: (800) 424-5454 or (202) 512-7470
		   
		   Congressional Relations

           Gloria Jarmon, Managing Director, [email protected] (202)
           512-4400 U.S. Government Accountability Office, 441 G Street NW,
           Room 7125 Washington, D.C. 20548
		   
		   Public Affairs

           Paul Anderson, Managing Director, [email protected] (202)
           512-4800 U.S. Government Accountability Office, 441 G Street NW,
           Room 7149 Washington, D.C. 20548

(542120)

This is a work of the U.S. government and is not subject to copyright
protection in the United States. It may be reproduced and distributed in
its entirety without further permission from GAO. However, because this
work may contain copyrighted images or other material, permission from the
copyright holder may be necessary if you wish to reproduce this material
separately.

www.gao.gov/cgi-bin/getrpt?GAO-07-812T .

To view the full product, including the scope

and methodology, click on the link above.

For more information, contact Katherine Siggerud at (202) 512-2834 or
[email protected].

Highlights of [40]GAO-07-812T , a testimony to the Subcommittee on
Highways and Transit, Committee on Transportation and Infrastructure

May 10, 2007

PUBLIC TRANSPORTATION

Preliminary Analysis of Changes to and Trends in FTA's New Starts and
Small Starts Programs

Through the New Starts program, the Federal Transit Administration (FTA)
identifies and recommends new fixed-guideway transit projects for
funding--including heavy, light, and commuter rail; ferry; and certain bus
projects. The Safe, Accountable, Flexible, Efficient Transportation Equity
Act: A Legacy for Users (SAFETEA-LU) authorized the New Starts program
through fiscal year 2009 and made a number of changes to the program,
including creating a separate program commonly called Small Starts. This
program is intended to offer an expedited and streamlined evaluation and
rating process for smaller-scale transit projects. FTA subsequently
introduced a separate eligibility category within the Small Starts program
for "Very Small Starts" projects. Very Small Starts projects are simple,
low-risk projects that FTA has determined qualify for a simplified
evaluation and rating process.

This testimony discusses GAO's preliminary findings on (1) FTA's
implementation of SAFETEA-LU changes to the New Starts program, (2) the
extent to which the New Starts pipeline (i.e., projects in the preliminary
engineering and final design phases) has changed over time, and (3) future
trends for the New Starts and Small Starts pipelines. To address these
objectives, GAO surveyed 215 project sponsors and interviewed FTA
officials, 15 project sponsors, and 3 industry groups. Our survey response
rate was 77 percent.

FTA has made progress in implementing SAFETEA-LU changes, but more work
remains. Project sponsors frequently identified two key issues for FTA to
consider as it moves forward in implementing SAFETEA-LU changes: (1)
further streamline the Small Starts program and (2) fully incorporate
economic development as a criterion in the New Starts and Small Starts
evaluation and rating processes. According to our analysis of the number
and types of requirements for New Starts and Small Starts application
processes, the Small Starts process has fewer requirements. However,
project sponsors said that FTA should further streamline the process by,
for example, eliminating requests for duplicate information requested in
required worksheets. SAFETEA-LU added economic development to the list of
project justification evaluation criteria that FTA must use to evaluate
and rate projects. However, FTA currently assigns a weight of 50 percent
each to cost-effectiveness and land use in calculating a project's overall
rating--the other 4 statutorily identified criteria, including economic
development, are not weighted. We previously reported that FTA's reliance
on two evaluation criteria to calculate a project's overall rating is
drifting away from the multiple-measure evaluation and rating process
outlined in statute. Further, without a weight for economic development,
project sponsors say, the evaluation and rating process does not reflect
an important benefit of certain projects. FTA officials said they are
currently working to develop an appropriate economic development measure
as part of their upcoming rulemaking.

The New Starts pipeline--that is, projects in different stages of
planning--has changed in size and composition since the fiscal year 2001
evaluation and rating cycle, and a variety of factors have contributed to
these changes. Since then, the number of projects in the New Starts
pipeline has decreased by more than half. Additionally, the types of
projects in the pipeline have changed during this time frame, as bus rapid
transit projects are now more common than commuter or light rail projects.
FTA officials attributed the decrease in the pipeline to their increased
scrutiny of applications to help ensure that only the strongest projects
enter the pipeline, and to their efforts to remove projects from the
pipeline that were not advancing or did not adequately address identified
problems. Project sponsors GAO interviewed provided other reasons for the
pipeline's decrease, including that the New Starts process is too complex,
time-consuming, and costly. Our survey results reflect many of these same
reasons for the decline in the pipeline.

Despite these concerns, GAO's survey of project sponsors indicates future
demand for New Starts, Small Starts, and Very Small Starts funding. The
sponsors GAO surveyed reported having 137 planned projects and intend to
seek New Starts, Small Starts, or Very Small Starts funding for almost
three-fourths of these projects. Project sponsors GAO surveyed also
reported considering a range of project type alternatives in their
planning. The most commonly cited alternatives were bus rapid transit and
light rail.

References

Visible links
  18. http://www.gao.gov/cgi-bin/getrpt?GAO-05-674
  19. http://www.gao.gov/cgi-bin/getrpt?GAO-05-172
  20. http://www.gao.gov/cgi-bin/getrpt?GAO-05-172
  22. http://www.gao.gov/cgi-bin/getrpt?GAO-06-819
  23. http://www.gao.gov/cgi-bin/getrpt?GAO-06-910T
  24. http://www.gao.gov/cgi-bin/getrpt?GAO-05-674
  25. http://www.gao.gov/cgi-bin/getrpt?GAO-04-748
  26. http://www.gao.gov/cgi-bin/getrpt?GAO-03-701
  27. http://www.gao.gov/cgi-bin/getrpt?GAO-02-840T
  28. http://www.gao.gov/cgi-bin/getrpt?GAO-02-603
  29. http://www.gao.gov/cgi-bin/getrpt?GAO-01-987
  30. http://www.gao.gov/cgi-bin/getrpt?GAO/RCED-00-149
  31. http://www.gao.gov/cgi-bin/getrpt?GAO/RCED-99-240
  32. http://www.gao.gov/cgi-bin/getrpt?GAO/RCED-99-113
*** End of document. ***