Public Transportation
Preliminary Analysis of Changes to and Trends in FTA's New Starts and Small Starts Programs Gao ID: GAO-07-812T May 10, 2007Through 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.
GAO-07-812T, Public Transportation: Preliminary Analysis of Changes to and Trends in FTA's New Starts and Small Starts Programs
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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:
GAO Highlights:
Highlights of GAO-07-812T, a testimony to the Subcommittee on Highways
and Transit, Committee on Transportation and Infrastructure
Why GAO Did This Study:
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.
What GAO Found:
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.
[Hyperlink, http://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 siggerudk@gao.gov.
[End of section]
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.[Footnote 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.
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,[Footnote 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.[Footnote 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.[Footnote 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.
Summary:
* 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.
* 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.[Footnote
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.
* 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.[Footnote
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.[Footnote 7]
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.[Footnote 8] When this phase is completed and federal
environmental requirements are satisfied, FTA may approve the project's
advancement into final design,[Footnote 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.
Figure 1: New Starts Planning and Development Process:
[See PDF for image]
Source: FTA.
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.
[End of figure]
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.[Footnote 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.[Footnote 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:
* All non-federal project funding must be committed and available for
the project.
* 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.
* 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[Footnote 12] or (b) be a corridor-
based bus project with the following minimum elements:
* substantial transit stations,
* traffic signal priority/pre-emption, to the extent, if any, that
there are traffic signals on the corridor,
* low-floor vehicles or level boarding,
* branding of the proposed service, and:
* 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.
Table 1: Implementation of SAFETEA-LU's New Starts Provisions, as of
April 2007:
SAFETEA-LU provisions: Establish the Small Starts program;
Description: Projects seeking less than $25 million in New Starts funds
will no longer be exempt from the ratings process once the Small Starts
rule is finalized; A new capital investment program called Small Starts
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;
Status of implementation: FTA issued the final interim guidance for
July 2006. By law, exempt projects will continue to be eligible for
funding without being rated until the final rule for Small Starts is
issued;
Remaining action(s): Rulemaking needed to establish Small Starts
program.
SAFETEA-LU provisions: Document the before-and-after study requirement;
Description: Project sponsors with FFGAs must conduct a study that (1)
describes and analyzes the impacts of the new fixed guideway capital
project on transit services and transit 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;
Status of implementation: FTA's May 2006 policy guidance requires that
project sponsors document the information produced during the planning
phase that will be needed for the before-and-after study and update the
information and analysis before entering final design;
Remaining action(s): Rulemaking needed to establish requirement.
SAFETEA-LU provisions: Require FTA to publish policy guidance;
Description: New Starts policy guidance must be published for notice
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;
Status of implementation: FTA has since published its New Starts policy
guidance for notice and comment each time significant changes have been
made, such as for its draft New Starts policy guidance in January 2006
and February 2007, and its final New Starts policy guidance in May
2006;
Remaining action(s): None.
SAFETEA-LU provisions: Revise New Starts overall project rating scale;
Description: The overall project rating is based on a 5-point scale of
"high," "medium-high," "medium," "medium-low," and "low." Projects are
required to receive an overall rating of "medium" or higher to be
recommended for funding;
Status of implementation: FTA used a 3 point- scale project rating
scale for the fiscal year 2007 and 2008 evaluation and rating cycles,
but changed ratings to "high," "medium," and "low." FTA's February 2007
policy guidance proposed implementing the 5-point scale starting in May
2007;
Remaining action(s): Issue final guidance on implementing the 5-point
scale in May 2007.
SAFETEA-LU provisions: Identify reliability of cost estimate and
ridership forecast as a consideration in evaluation process;
Description: The Secretary is required to analyze, evaluate, and
consider the reliability of the forecasting methods used by New Starts
project sponsors and their contractors to estimate costs and ridership;
Status of implementation: FTA's January 2006 policy guidance for New
Starts and advanced notice of proposed rulemaking for Small Starts
proposed an approach for incorporating reliability into project
evaluations;
Remaining action(s): Rulemaking needed to establish requirement.
SAFETEA-LU provisions: Add economic development criterion to evaluation
process;
Description: Projects will be evaluated based on a review of their
effects on local economic development;
Status of implementation: FTA considers economic development as an
unweighted "other factor" criterion in the evaluation process. FTA has
sought comment from various parties on appropriate measures for
economic development;
Remaining action(s): Rulemaking needed to solicit comment on and
finalize measures for economic development.
SAFETEA-LU provisions: Identify land use as a specific evaluation
criterion;
Description: Projects will be evaluated based on a review of their
public transportation supportive land use policies and future patterns;
Status of implementation: FTA considers land use as a weighted
criterion in the evaluation process;
Remaining action(s): None.
SAFETEA-LU provisions: Clarify nonfederal financial commitment;
Description: The Secretary is not authorized to require a nonfederal
financial commitment for a project that is more than 20 percent of its
net capital cost;
Status of implementation: In its reporting instructions for New Starts
issued in May 2006, FTA clarified that a nonfederal commitment of more
than 20 percent of the project's net capital cost is not required,
although a greater nonfederal commitment is encouraged;
Remaining action(s): None.
SAFETEA-LU provisions: Establish incentives for accurate cost and
ridership forecasts;
Description: A higher share of New Starts funding may be made available
to project 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;
Status of implementation: FTA implemented that a higher share of New
Starts funding may be made available to project sponsors if the project
cost and ridership estimates are within 10 percent of the original
estimates in its fiscal years 2007 and 2008 evaluation cycle;
Remaining action(s): None.
SAFETEA-LU provisions: Assess contractors' performance;
Description: The Secretary will submit an annual report to
congressional committees analyzing the consistency and accuracy of the
cost and ridership estimates made by contractors to public
transportation agencies developing new capital projects;
Status of implementation: FTA submitted an annual report to
congressional committees in August 2006 that described how FTA intends
to analyze the consistency and accuracy of the costs and ridership
estimates made by contractors to public transportation agencies
developing new capital projects;
Remaining action(s): None.
Source: GAO analysis of SAFETEA-LU and FTA data.
[End of table]
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.[Footnote 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.
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.[Footnote 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.
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.[Footnote 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.[Footnote 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.[Footnote 17]
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.
Table 2: Number of Projects in the Pipeline, Evaluated and Rated
Projects, by Fiscal Year:
Fiscal year: 2001;
Number of projects in the pipeline[A]: 48;
Number of projects evaluated and rated[B]: 41.
Fiscal year: 2002;
Number of projects in the pipeline[A]: 40;
Number of projects evaluated and rated[B]: 26.
Fiscal year: 2003;
Number of projects in the pipeline[A]: 43;
Number of projects evaluated and rated[B]: 25.
Fiscal year: 2004;
Number of projects in the pipeline[A]: 52;
Number of projects evaluated and rated[B]: 27.
Fiscal year: 2005;
Number of projects in the pipeline[A]: 37;
Number of projects evaluated and rated[B]: 23.
Fiscal year: 2006;
Number of projects in the pipeline[A]: 30;
Number of projects evaluated and rated[B]: 18.
Fiscal year: 2007;
Number of projects in the pipeline[A]: 22;
Number of projects evaluated and rated[B]: 18.
Fiscal year: 2008;
Number of projects in the pipeline[A]: 19;
Number of projects evaluated and rated[B]: 14.
Source: GAO analysis of FTA data.
[A] Includes projects that were evaluated and rated for the fiscal year
evaluation cycle, as well as "exempt" projects.
[B] Includes 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."
[End of table]
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:
[See PDF for image]
Source: GAO.
[End of figure]
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).[Footnote 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.
Figure 3: Number of Projects Withdrawn or Removed from the New Starts
Pipeline Since 2001:
[See PDF for image]
Source: GAO analysis of FTA data.
[End of figure]
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:
* 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.
* 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.[Footnote 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.[Footnote 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.
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).[Footnote 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.
Figure 4: Project Sponsors Use of New Starts, Small Starts, and Very
Small Starts for Planned Projects:
[See PDF for image]
Source: GAO.
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).
[End of figure]
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.[Footnote 22]
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 siggerudk@gao.gov. 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.
[End of section]
Related GAO Products:
Public Transportation: New Starts Program Is in a Period of Transition.
GAO-06-819. Washington, D.C.: August 30, 2006.
Public Transportation: Preliminary Information on FTA's Implementation
of SAFETEA-LU Changes. 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. 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.
FOOTNOTES
[1] Fixed-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.
[2] The 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.
[3] TEA-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.
[4] Project 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.
[5] Of 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.
[6] Alternatives 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.
[7] Thirty 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.
[8] During 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.
[9] Final 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.
[10] The 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.
[11] The 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.
[12] The fixed guideway portion need not be contiguous, but should be
located to result in faster and more reliable running times.
[13] FTA officials clarified that the level of ridership projections
required is dependent on the nature of the project.
[14] GAO, 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).
[15] Indirect 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.
[16] GAO, 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).
[17] GAO-05-172.
[18] The 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.
[19] Of 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.
[20] For 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.
[21] For 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.
[22] Thirty 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.
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