Public Transportation
Future Demand Is Likely for New Starts and Small Starts Programs, but Improvements Needed to the Small Starts Application Process Gao ID: GAO-07-917 July 27, 2007Through the New Starts program, the Federal Transit Administration (FTA) identifies and recommends new fixed-guideway transit projects for funding. The Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU) created a separate program, commonly called Small Starts, which is intended to offer a 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. These are simple, low-risk projects that qualify for a simplified evaluation and rating process. SAFETEA-LU requires GAO to annually review FTA's New Starts process. This report presents information on (1) FTA's fiscal year 2008 funding recommendations, (2) the extent to which the New Starts pipeline has changed over time, and (3) future projected trends for the New Starts and Small Starts pipelines. To address these objectives, GAO surveyed 215 project sponsors--78 percent of which responded--and interviewed FTA officials, 15 project sponsors, and 3 industry groups.
For the fiscal year 2008 evaluation cycle, FTA recommended to Congress 10 New Starts and 4 Small Starts projects for funding. The administration's budget request of $1.40 billion is primarily allocated to New Starts projects with existing and pending full funding grant agreements. SAFETEA-LU made several changes to the New Starts evaluation and rating process, which FTA is implementing. Since the fiscal year 2001 evaluation and rating cycle, the New Starts pipeline--that is, projects in the preliminary engineering and final design phases--has changed in size and composition, responding to a variety of factors. The number of projects in the New Starts pipeline has decreased by more than one-half, and the types of projects in the pipeline have changed, with bus rapid transit replacing commuter or light rail as the most common type of project. FTA officials attributed the decrease in the number of projects to FTA's increased scrutiny of applications to help ensure that only the strongest projects enter the pipeline, and to FTA's efforts to remove projects from the pipeline that were not advancing or did not adequately address identified problems. Project sponsors that GAO interviewed cited other reasons for the pipeline's decrease, including the complexity, lengthiness, and cost of the New Starts process. The lengthy nature of the New Starts process is due, in part, to the rigorous and systematic evaluation and rating process established by law--which GAO has previously noted could serve as a model for other programs. Other reasons cited by project sponsors for the decrease in the pipeline include finding alternative sources of funding or opting not to apply because they realize their projects are unlikely to receive funding. FTA is considering different ideas on how to improve the New Starts process, some of which may address the concerns identified by project sponsors. Despite these concerns, GAO's survey of project sponsors indicated future demand for New Starts funding. Project sponsors reported having 141 planned New Starts, Small Starts, and Very Small Starts projects and will likely seek New Starts funding for almost three-fourths of these projects. Of these planned projects, project sponsors indicated that they intend to seek New Starts funding for 57 New Starts projects, 30 Small Starts projects, and 14 Very Small Starts projects. Project sponsors GAO surveyed also reported considering a range of alternative project types in their planning. Although project sponsors expressed appreciation for the creation of the Small Starts program, noting it filled a funding gap, they said the Small Starts application process is not tailored to the Small Starts program and is time-consuming, costly, and duplicative. GAO also found that the application is not always tailored for Small Starts applicants and, in several instances, requests duplicative information. FTA officials acknowledged that the Small Starts application process could be further streamlined, and they are working to decrease the burden.
RecommendationsOur recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.
Director: Team: Phone:GAO-07-917, Public Transportation: Future Demand Is Likely for New Starts and Small Starts Programs, but Improvements Needed to the Small Starts Application Process
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Report to Congressional Committees:
United States Government Accountability Office:
GAO:
July 2007:
Public Transportation:
Future Demand Is Likely for New Starts and Small Starts Programs, but
Improvements Needed to the Small Starts Application Process:
GAO-07-917:
GAO Highlights:
Highlights of GAO-07-917, a report to congressional committees
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. The Safe, Accountable, Flexible, Efficient Transportation
Equity Act: A Legacy for Users (SAFETEA-LU) created a separate program,
commonly called Small Starts, which is intended to offer a 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. These are
simple, low-risk projects that qualify for a simplified evaluation and
rating process. SAFETEA-LU requires GAO to annually review FTA‘s New
Starts process. This report presents information on (1) FTA‘s fiscal
year 2008 funding recommendations, (2) the extent to which the New
Starts pipeline has changed over time, and (3) future projected trends
for the New Starts and Small Starts pipelines. To address these
objectives, GAO surveyed 215 project sponsors”78 percent of which
responded”and interviewed FTA officials, 15 project sponsors, and 3
industry groups.
What GAO Found:
For the fiscal year 2008 evaluation cycle, FTA recommended to Congress
10 New Starts and 4 Small Starts projects for funding. The
administration‘s budget request of $1.40 billion is primarily allocated
to New Starts projects with existing and pending full funding grant
agreements. SAFETEA-LU made several changes to the New Starts
evaluation and rating process, which FTA is implementing.
Since the fiscal year 2001 evaluation and rating cycle, the New Starts
pipeline”that is, projects in the preliminary engineering and final
design phases”has changed in size and composition, responding to a
variety of factors. The number of projects in the New Starts pipeline
has decreased by more than one-half, and the types of projects in the
pipeline have changed, with bus rapid transit replacing commuter or
light rail as the most common type of project. FTA officials attributed
the decrease in the number of projects to FTA‘s increased scrutiny of
applications to help ensure that only the strongest projects enter the
pipeline, and to FTA‘s efforts to remove projects from the pipeline
that were not advancing or did not adequately address identified
problems. Project sponsors that GAO interviewed cited other reasons for
the pipeline‘s decrease, including the complexity, lengthiness, and
cost of the New Starts process. The lengthy nature of the New Starts
process is due, in part, to the rigorous and systematic evaluation and
rating process established by law”which GAO has previously noted could
serve as a model for other programs. Other reasons cited by project
sponsors for the decrease in the pipeline include finding alternative
sources of funding or opting not to apply because they realize their
projects are unlikely to receive funding. FTA is considering different
ideas on how to improve the New Starts process, some of which may
address the concerns identified by project sponsors.
Despite these concerns, GAO‘s survey of project sponsors indicated
future demand for New Starts funding. Project sponsors reported having
141 planned New Starts, Small Starts, and Very Small Starts projects
and will likely seek New Starts funding for almost three-fourths of
these projects. Of these planned projects, project sponsors indicated
that they intend to seek New Starts funding for 57 New Starts projects,
30 Small Starts projects, and 14 Very Small Starts projects. Project
sponsors GAO surveyed also reported considering a range of alternative
project types in their planning. Although project sponsors expressed
appreciation for the creation of the Small Starts program, noting it
filled a funding gap, they said the Small Starts application process is
not tailored to the Small Starts program and is time-consuming, costly,
and duplicative. GAO also found that the application is not always
tailored for Small Starts applicants and, in several instances,
requests duplicative information. FTA officials acknowledged that the
Small Starts application process could be further streamlined, and they
are working to decrease the burden.
What GAO Recommends:
GAO recommends that FTA make several program improvements, including
further streamlining the Small Starts application process. FTA
officials agreed to consider GAO‘s recommendations.
[hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-07-917.]
To view the full product, including the scope and methodology, click on
the link above. To view the e-supplement online, click on
www.gao.gov/cgi-bin/getrpt?GAO-07-927SP. For more information, contact
Katherine Siggerud at (202) 512-2834 or siggerudk@gao.gov.
[End of section]
Contents:
Letter:
Results in Brief:
Background:
FTA Recommended 14 Projects for Fiscal Year 2008 Funding;
SAFETEA-LU Changes to Evaluation and Rating Process Remain:
Changes in the Size and Composition of the New Starts Pipeline Are
Likely Due to Different Factors:
Future Demand for New Starts Program Expected;
Project Sponsors Seek Small Starts Program Improvements:
Conclusions:
Recommendations for Executive Action:
Agency Comments:
Appendix I: Scope and Methodology:
Appendix II: GAO Contact and Staff Acknowledgments:
Related GAO Products:
Tables:
Table 1: Projects Recommended for an FFGA and Other Funding, Fiscal
Year 2008:
Table 2: Small Starts and Very Small Starts Projects, Fiscal Year 2008:
Table 3: Implementation of SAFETEA-LU Changes to the New Starts
Evaluation and Rating Process, as of July 2007:
Table 4: Number of Projects in the Pipeline, and Evaluated and Rated,
by Fiscal Year:
Table 5: Total Dollar Amounts and Numbers of New Starts FFGAs, by
Fiscal Year:
Table 6: New Starts, Small Starts, and Very Small Starts Application
Requirements:
Figures:
Figure 1: Planning and Development Process for New Starts Projects:
Figure 2: Project Evaluation Criteria for New Starts Projects:
Figure 3: Planning and Development Process for Small Starts and Very
Small Starts Projects:
Figure 4: Planned Uses of the Administration's Proposed Fiscal Year
2008 Funding for the Capital Investment Grants Program:
Figure 5: Types of Projects in the New Starts Pipeline, by Fiscal Year:
Figure 6: Project Sponsors' Expected Use of New Starts Funding for
Planned New Starts, Small Starts, and Very Small Starts Projects:
Abbreviations:
FFGA: full funding grant agreement
FTA: Federal Transit Administration
PCGA: project construction grant agreement
SAFETEA-LU: Safe, Accountable, Flexible, Efficient Transportation
Equity Act: A Legacy for Users:
[End of section]
United States Government Accountability Office:
Washington, DC 20548:
July 27, 2007:
The Honorable Christopher J. Dodd:
Chairman:
The Honorable Richard Shelby:
Ranking Member:
Committee on Banking, Housing, and Urban Affairs:
United States Senate:
The Honorable James L. Oberstar:
Chairman:
The Honorable John L. Mica:
Ranking Republican Member:
Committee on Transportation and Infrastructure:
House of Representatives:
Since the early 1970s, a significant portion of the federal
government's share of new capital investment in mass transportation has
come through the Federal Transit Administration's (FTA) New Starts
program. Through this program, FTA identifies and recommends new fixed-
guideway transit projects--including heavy, light, and commuter rail;
ferry; and certain bus projects--for grants, typically through full
funding grant agreements (FFGA).[Footnote 1] An FFGA establishes the
terms and conditions for federal funds available for the project,
including the maximum amount of federal funds available. 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.[Footnote 2] 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 need for
less than $75 million in funding from this program and a total capital
cost of less than $250 million.[Footnote 3] FTA subsequently introduced
a new eligibility category within the Small Starts program called Very
Small Starts, which is for projects with 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 other
Small Starts projects. In July 2006, FTA issued interim guidance on
Small Starts, including Very Small Starts, to govern the administration
of the program until the final rule is issued. FTA expects to issue the
final rule in 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, FTA must continue 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. FTA
determines which projects to fund through an evaluation and rating
process, whereby projects are evaluated on the basis of various
criteria and then are assigned a "high," "medium," or "low" rating.
We are required to report each year on FTA's processes and procedures
for evaluating, rating, and recommending New Starts projects for
federal funding and on FTA's implementation of these processes and
procedures.[Footnote 4] This report examines (1) how many and what
types of projects FTA evaluated, rated, and recommended for funding in
the fiscal year 2008 evaluation and rating cycle, and the extent to
which FTA has implemented SAFETEA-LU's changes to the New Starts
evaluation and rating process; (2) the extent to which, if any, the New
Starts pipeline has changed since the fiscal year 2001 evaluation and
rating cycle, and the factors that contributed to any such trends; and
(3) any projected trends for the New Starts and Small Starts pipelines
and the views of project sponsors on the Small Starts program. To
address these objectives, we surveyed all project sponsors that are
located in urbanized areas with a population of over 200,000 and that
have an annual transit ridership of over 1 million.[Footnote 5] In
total, we surveyed 215 project sponsors, asking them about their
experience to date with the New Starts program and plans to apply for
the program in the future. Of the 215 project sponsors, 168 responded
to the survey--for a survey response rate of 78 percent. The survey and
a more complete tabulation of the results can be viewed at [hyperlink,
http://www.gao.gov/cgi-bin/getrpt?GAO-07-927SP]. We also interviewed 15
project sponsors, including the 10 sponsors that applied for funding
for Small Starts projects, including Very Small Starts projects, for
the fiscal year 2008 evaluation cycle. We selected the other 5 project
sponsors that we interviewed on the basis of their agencies' experience
with the New Starts processes, size, and location. In addition, we
interviewed FTA officials and representatives from transportation
industry associations. We also reviewed FTA's New Starts and Small
Starts guidance, the Advanced Notice of Proposed Rule Making for Small
Starts, and the statutory provisions that address the New Starts
program. In May 2007, we reported on preliminary findings from our
work[Footnote 6]. We conducted our work from November 2006 through July
2007 in accordance with generally accepted government auditing
standards. (See app. I for more information about our scope and
methodology.)
Results in Brief:
For the fiscal year 2008 evaluation cycle, FTA evaluated and rated 18
projects--including 14 New Starts, 1 Small Starts, and 3 Very Small
Starts projects--and recommended to Congress 14 of these projects for
funding. Of the 14 New Starts projects rated, 2 were rated as "high,"
12 were rated as "medium," and none were rated as "low." FTA
recommended 10 of the 14 New Starts projects for funding. Specifically,
FTA recommended 2 New Starts projects for proposed FFGAs and 2 projects
for pending FFGAs.[Footnote 7] In addition, FTA identified 6 "other"
New Starts projects that may be eligible for funding outside of FFGAs
in fiscal year 2008. FTA received 12 requests to enter project
development for Small Starts and Very Small Starts projects, and
evaluated and rated 4 of them. FTA rated these 4 projects as "medium"
and recommended them for funding. The administration's fiscal year 2008
budget request for the New Starts program is $1.40 billion. A majority
of the requested funding is allocated to New Starts projects with
existing and pending FFGAs and to those proposed for new FFGAs. SAFETEA-
LU made several changes to the New Starts evaluation and rating
process, including adding economic development as an evaluation
criterion and changing the rating scale. FTA is in the process of
addressing these SAFETEA-LU changes and expects to have them
implemented by the completion of its upcoming rulemaking.
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 one-half (from 48 to 19). The level
of funding per project has grown since fiscal year 2001, from about $20
million to about $103 million on average. 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 bus
rapid transit projects account for a small portion of the total cost
(13 percent) 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 have 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 complex, time-consuming, and costly. In addition, project
sponsors said they found alternative sources of funding or decided not
to apply because the process is well-established and they realize their
projects are unlikely to receive funding. Our survey identified similar
reasons offered by project sponsors. For example, the project sponsors
we surveyed with completed transit projects most often said they did
not apply to the New Starts program because the process was lengthy or
they 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
8] The lengthiness 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, 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 indicated that
there is likely to be a future demand for New Starts funding. The
project sponsors we surveyed reported having 141 planned projects--that
is, projects currently undergoing an alternatives analysis or another
type of corridor-based planning study.[Footnote 9] According to the
project sponsors, they plan to seek New Starts funding for almost three-
fourths (72 percent) of these 141 New Starts, Small Starts, or Very
Small Starts projects. The project sponsors we surveyed also indicated
that they were considering a range of project alternative types in
their planning. The most commonly cited types were bus rapid transit
and light rail. Our survey results further indicated 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
that have not previously applied to the New Starts program. For
example, of 30 project sponsors that intend to seek New Starts funding
for their planned Small Starts or Very Small Starts projects, 13 have
not previously applied for New Starts funding.[Footnote 10] Although
project sponsors we interviewed expressed appreciation for the creation
of the Small Starts program, noting that it fulfilled a funding gap,
they said the Small Starts application process is not tailored to the
Small Starts program and is time-consuming, costly, and duplicative.
They suggested, for example, that FTA further streamline the Small
Starts application process by eliminating requests for information
already requested in required worksheets. We also found that the
application is not always tailored for Small Starts applicants and, in
several instances, requests duplicative information. FTA officials
acknowledged that the Small Starts application process could be further
streamlined, and they are working to decrease the burden. The project
sponsors we interviewed, especially those that have never applied for
New Starts funding, would also like more assistance from FTA on how to
complete the application process. According to FTA, 8 of the 12
applications for fiscal year 2008 were incomplete or the proposed
projects were ineligible. In some instances, project sponsors did not
understand what constitutes an eligible project. We found that although
FTA's Small Starts guidance outlines the elements required for a
project to receive funding, such as traffic signal priority/preemption,
level boarding, or branding of the proposed service, it does not
explicitly identify as ineligible those projects that have already
begun to incrementally incorporate certain Small Starts elements.
This report contains three recommendations to the Secretary of
Transportation to improve the Small Starts program. To facilitate
information sharing about the program, FTA should develop a Small
Starts working group and conduct training for applicants. To ensure
that project sponsors better understand what types of projects are
eligible for funding as Small Starts, FTA should clarify in its
guidance that a project must include all of the required elements
listed in the program guidance and must also be providing new service.
Finally, to ensure that the Small Starts program provides a streamlined
application process for applicants, FTA should continue to refine its
Small Starts application process.
The Department of Transportation, including FTA, reviewed a draft of
this report. FTA generally agreed with the report's findings and
conclusions, and agreed to consider our recommendations. They also
provided technical clarifications, which we incorporated as
appropriate.
Background:
SAFETEA-LU authorized over $45 billion for federal transit programs,
including $8 billion for the New Starts program, from fiscal years 2005
through 2009. Under the New Starts program, 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). SAFETEA-LU also made changes to the New Starts
program, including changes to its evaluation and rating process. FTA
already has implemented some of these changes and has undertaken
efforts to address the remaining changes.
FTA generally funds New Starts projects through FFGAs, 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). As required by federal
statute, 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, in a specific corridor versus in a
region. 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 11] When this phase is completed and
federal environmental requirements are satisfied, FTA may approve the
project's advancement into final design,[Footnote 12] after which FTA
may approve the project for an FFGA and proceed to construction, as
provided for in statute. FTA oversees grantees' management of projects
from the preliminary engineering phase through the construction phase
and evaluates the projects for advancement into each phase of the
process. FTA also evaluates the projects annually for the New Starts
report to Congress.
Figure 1: Planning and Development Process for New Starts Projects:
[See PDF for image]
Source: FTA.
Note: The National Environmental Policy Act of 1969, Pub. L. No. 91-
190, codified at 42 U.S.C. chapter 55, requires detailed statements
assessing the environmental impact of and alternatives to major federal
actions significantly affecting the environment, including grants
funding fixed-guideway projects.
[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
local financial commitment and project justification criteria--and then
assigns an overall rating (see fig. 2).[Footnote 13] 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. Lastly, 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 the final design phases, and yearly for
inclusion in the New Starts annual report to Congress.
Figure 2: Project Evaluation Criteria for New Starts Projects:
[See PDF for image]
Source: GAO analysis of FTA data.
Note: This figure outlines the criteria FTA currently uses to evaluate
New Starts projects, but the criteria are subject to change as a result
of SAFETEA-LU changes that FTA has yet to make.
[End of figure]
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 14] Although many projects receive a summary rating
that would make them eligible for an FFGA, only a few are proposed for
an FFGA in a given fiscal year. FTA proposes a project for an FFGA when
it believes that the project will be able to meet the following
conditions during the fiscal year for which funding is proposed:
* All nonfederal project funding must be committed and available for
the project.
* The project must be in the final design phase and have progressed far
enough for uncertainties about costs, benefits, and impacts (i.e.,
environmental or financial) to be 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.
SAFETEA-LU introduced a number of changes to the New Starts program,
including some that affect the evaluation and rating process that we
have previously described in figure 1. 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. SAFETEA-LU also established the Small Starts program, a new
capital investment grant program, simplifying the requirements imposed
for those seeking funding for lower-cost projects, such as bus rapid
transit, streetcar, 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
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 also (1) meet the definition of a fixed guideway for at
least 50 percent of the project length in the peak period[Footnote 15]
or (2) be a corridor-based bus project with the following minimum
elements:
* substantial transit stations;
* traffic signal priority/preemption, 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/15-minute off-peak running times (i.e., headways) or
better while operating at least 14 hours per weekday.
FTA has also subsequently 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 of 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).
FTA evaluates Small Starts and Very Small Starts projects using various
financial and project justification criteria, including cost-
effectiveness and land use. For Small Starts and Very Small Starts,
SAFETEA-LU condensed the New Starts processes used for large projects.
Preliminary engineering and final design are combined into one phase,
referred to as "project development." FTA may recommend proposed Small
Starts and Very Small Starts for funding after such projects have been
approved to enter into project development, are "ready" to implement
their proposed project, and continue to be rated at least "medium" for
both project justification and local financial commitment. FTA intends
to provide funding for Small Starts and Very Small Starts projects
through project construction grant agreements (PCGA), which are similar
to FFGAs (see fig. 3).
Figure 3: Planning and Development Process for Small Starts and Very
Small Starts Projects:
[See PDF for image]
Source: FTA.
Note: The National Environmental Policy Act of 1969, Pub. L. No. 91-
190, codified at 42 U.S.C. chapter 55, requires detailed statements
assessing the environmental impact of and alternatives to major federal
actions significantly affecting the environment, including grants
funding fixed-guideway projects.
[End of figure]
FTA Recommended 14 Projects for Fiscal Year 2008 Funding;
SAFETEA-LU Changes to Evaluation and Rating Process Remain:
FTA evaluated and rated 18 New Starts, Small Starts, and Very Small
Starts projects for funding during the fiscal year 2008 evaluation
cycle. Of the 14 New Starts projects that FTA evaluated and rated, FTA
recommended to Congress funding for 10 projects, including 2 new
projects, 2 pending projects, and 6 "other" projects. FTA also
evaluated and rated 4 Small Starts and Very Small Starts applications,
and recommended all of these projects for funding. The fiscal year 2008
President's budget requests $1.40 billion in New Starts funding,
including $100 million for the Small Starts program. Although SAFETEA-
LU authorized $200 million each year for the Small Starts program, no
funds have yet been allocated to the program, due, in part, to its
newness.
FTA Evaluated and Rated 14 New Starts Projects, and Recommended Funding
for 10 Projects:
FTA's Annual Report on New Starts: Proposed Allocations of Funds for
Fiscal Year 2008 (annual report) identified 19 New Starts projects in
preliminary engineering and final design. FTA evaluated and rated 14 of
these projects, rating 2 as "high," 12 as "medium," and none as
"low."[Footnote 16] Five additional projects were statutorily exempt
from being rated because their sponsors requested less than $25 million
in federal funding.
FTA recommended 10 New Starts projects for funding. Specifically, FTA
recommended 2 New Starts projects for proposed FFGAs. The total capital
cost of these 2 projects is estimated to be $6.30 billion, with the
total federal New Starts share expected to about one-third of this
total. In addition, FTA recommended funding for 2 projects with pending
FFGAs. The total capital cost of these 2 projects is estimated to be
$1.13 billion, and the total federal New Starts share is expected to be
about one-half of the total cost. FTA also recommended reserving $72.08
million in New Starts funding for 6 "other" projects. FTA selected
these "other" projects using the decision rules that the projects have
a "medium" or higher rating; have a "medium" or higher cost-
effectiveness rating; and is expected to advance to final design as of
June 2008. According to FTA, no other project in preliminary
engineering or final design met these decision rules. Similar to last
year, FTA did not specify how much would be set aside for the 6 "other"
New Starts projects because it wanted to ensure that the projects were
moving forward as anticipated before making specific funding
recommendations to Congress. Reserving funds for these projects without
specifying a particular amount for any given project will allow the
administration to make "real time" funding recommendations when
Congress is making appropriations decisions. FTA does not expect that
all 6 "other" projects will be recommended for funding in fiscal year
2008 (see table 1).[Footnote 17]
Table 1: Projects Recommended for an FFGA and Other Funding, Fiscal
Year 2008:
Dollars in millions.
Proposed FFGA;
Location: [Empty];
Total capital costs: [Empty];
New Starts share of total capital costs: [Empty].
Second Avenue Subway Phase I;
Location: New York, NY;
Total capital costs: $4,655.40;
New Starts share of total capital costs: 28%.
University Link LRT Extension;
Location: Seattle, WA;
Total capital costs: 1,645.90;
New Starts share of total capital costs: 46.
Total;
Location: [Empty];
Total capital costs: $6,301.30;
New Starts share of total capital costs: [Empty].
Pending FFGA;
Location: [Empty];
Total capital costs: [Empty];
New Starts share of total capital costs: [Empty].
West Corridor LRT;
Location: Denver, CO;
Total capital costs: $574.20;
New Starts share of total capital costs: 51%.
South Corridor I-205 / Portland Mall LRT;
Location: Portland, OR;
Total capital costs: 557.40;
New Starts share of total capital costs: 60.
Total;
Location: [Empty];
Total capital costs: $1,131.60;
New Starts share of total capital costs: [Empty].
Other project;
Location: [Empty];
Total capital costs: [Empty];
New Starts share of total capital costs: [Empty].
New Britain - Hartford Busway;
Location: Hartford, CT;
Total capital costs: $458.78;
New Starts share of total capital costs: 60%.
Northstar Corridor Rail;
Location: Minneapolis-Big Lake, MN;
Total capital costs: 307.31;
New Starts share of total capital costs: 49.
North Corridor BRT;
Location: Houston, TX;
Total capital costs: 275.30;
New Starts share of total capital costs: 50.
Southeast Corridor BRT;
Location: Houston, TX;
Total capital costs: 169.80;
New Starts share of total capital costs: 50.
Norfolk LRT;
Location: Norfolk, VA;
Total capital costs: 232.10;
New Starts share of total capital costs: 55.
Dulles Corridor Metrorail Project--Extension to Wiehle Ave.;
Location: Northern Virginia, VA;
Total capital costs: 2,065.00;
New Starts share of total capital costs: 44.
Total;
Location: [Empty];
Total capital costs: $3,508.29;
New Starts share of total capital costs: [Empty].
Legend:
BRT = bus rapid transit;
LRT = light rail transit;
Source: GAO analysis of FTA data.
[End of table]
FTA Evaluated and Rated 4 Small Starts and Very Small Starts Projects,
and Recommended Funding for All 4 Projects:
In the fall of 2006, FTA received 12 Small Starts and Very Small Starts
requests to enter project development for the fiscal year 2008
evaluation cycle.[Footnote 18] A majority of these Small Starts and
Very Small Starts requests to enter project development were from
project sponsors in the western and southern regions of the country and
all but 2 were for bus rapid transit projects. FTA determined that only
1 Small Starts project and 3 Very Small Starts projects were complete,
ready, and eligible to be approved into project development. FTA
subsequently proposed these projects for a PCGA. We found that the
reasons for ineligible projects and incomplete applications ranged from
unclear program guidance to inconsistent information provided by FTA.
(See table 2 for more information on the Small Starts and Very Small
Starts projects for fiscal year 2008.)
Table 2: Small Starts and Very Small Starts Projects, Fiscal Year 2008:
Dollars in millions.
Project name: Pioneer Parkway BRT;
City: Springfield, OR;
SS/VSS: SS; Cost: $36.99;
New Starts share: $29.59;
Project eligible: Yes;
Application complete: Yes.
Project name: Pacific Hwy So BRT;
City: King County, WA;
SS/VSS: VSS;
Cost: 25.07;
New Starts share: 14.08;
Project eligible: Yes;
Application complete: Yes.
Project name: Troost Corridor BRT;
City: Kansas City, MO;
SS/VSS: VSS;
Cost: 30.73;
New Starts share: 24.58;
Project eligible: Yes;
Application complete: Yes.
Project name: Metro Rapid System Bus Gap Closure Project;
City: Los Angeles, CA;
SS/VSS: VSS;
Cost: 25.66;
New Starts share: 16.68;
Project eligible: Yes;
Application complete: Yes.
Project name: Van Nuys Corridor Rapid Bus;
City: Los Angeles, CA;
SS/VSS: VSS;
Cost: 8.00;
New Starts share: 6.84;
Project eligible: No;
Application complete: Yes.
Project name: Mountlake Terrace BRT Station;
City: Seattle, WA;
SS/VSS: VSS;
Cost: 31.72;
New Starts share: 9.92;
Project eligible: No;
Application complete: Yes.
Project name: Sepulveda Corridor Rapid Bus;
City: Los Angeles, CA;
SS/VSS: VSS;
Cost: 37.00;
New Starts share: 31.60;
Project eligible: No;
Application complete: Yes.
Project name: Mason Transportation Corridor (BRT);
City: Fort Collins, CO;
SS/VSS: SS;
Cost: 68.28;
New Starts share: 54.62;
Project eligible: Yes;
Application complete: No.
Project name: Mountain Links BRT;
City: Flagstaff, AZ;
SS/VSS: VSS;
Cost: 17.73;
New Starts share: 13.76;
Project eligible: Maybe;
Application complete: No.
Project name:Bus/Gondola Station;
City: Breckenridge, CO;
SS/VSS: VSS;
Cost: 46.70;
New Starts share: 37.36;
Project eligible: No;
Application complete: No.
Project name: North-South T-Way BRT;
City: Sarasota, FL;
SS/VSS: SS;
Cost: 140.15;
New Starts share: N/A;
Project eligible: Maybe;
Application complete: No.
Project name: Las Colinas APT Connector;
City: Irving, TX;
SS/VSS: SS;
Cost: N/A;
New Starts share: N/A;
Project eligible: No;
Application complete: No.
Legend:
APT = area personal transit;
BRT = bus rapid transit;
SS = Small Starts project that does not qualify as a Very Small Starts
project;
VSS = Very Small Starts project;
Source: GAO analysis of FTA data.
Note: The numbers included in this table are what was recommended by
FTA in the New Starts annual report but the actual total capital cost
and percent of New Starts share is subject to change at the time FTA
executes the FFGA.
[End of table]
FTA evaluated and rated the 4 Small Starts and Very Small Starts
projects that were eligible and had complete applications. All 4 of
these projects received a "medium" rating. FTA approved the 4 Small
Starts and Very Small Starts projects for advancement into the project
development phase on the basis of its review, evaluation, and rating of
their applications. The total capital cost of these projects is
estimated to be $118.4 million, and the total Small Starts, including
Very Small Starts, share is expected to be $84.9 million. FTA has also
recommended that $48.2 million be allocated for "other" Small Starts
projects that were not ready for advancement into project development
at the time applications were due, but that may be ready for
advancement later in fiscal year 2008.
The Administration's Fiscal Year 2008 Budget Proposal Requests $1.40
Billion for the New Starts Program:
The administration's fiscal year 2008 budget proposal requests that
$1.40 billion be made available for the New Starts program. This amount
is $166 million less than the program's fiscal year 2007 appropriation.
Figure 4 illustrates the planned uses of the administration's proposed
fiscal year 2008 budget for New Starts, including the following:
* $863.74 million would be shared among the 11 New Starts projects with
existing FFGAs,
* $120 million would be shared between the 2 New Starts projects with
pending FFGAs,
* $210 million would be shared between the 2 New Starts projects
proposed for new FFGAs,
* $72.08 million would be shared by as many as 6 "other" New Starts
projects to continue their development, and:
* $100 million would be used for new Small Starts and Very Small Starts
projects.
Figure 4: Planned Uses of the Administration's Proposed Fiscal Year
2008 Funding for the Capital Investment Grants Program:
[See PDF for image]
Source: GAO analysis of FTA data.
Notes:
FTA is authorized to use up to 1 percent of amounts made available for
the New Starts program for project management oversight activities.
Federal statute requires that specified amounts of New Starts funds be
set aside annually for projects in Alaska and Hawaii; new fixed-
guideway systems; and extensions to existing systems that are
ferryboats, ferryboat terminals, or approaches to ferryboat terminals.
FTA is authorized to provide $5 million for each fiscal year from 2006
through 2009 for the Denali Commission, which provides critical
utilities, infrastructure, and economic support throughout Alaska,
particularly in remote communities.
[End of figure]
Although SAFETEA-LU authorized $200 million for the Small Starts
program each year from fiscal years 2006 through 2009, no funding for
the program has been allocated to date. For fiscal year 2007, the
administration's budget proposal requested $100 million for the Small
Starts program. Of the $1.57 billion allocated to the New Starts
program for fiscal year 2007, no funding was appropriated for Small
Starts projects. The administration's budget proposal for fiscal year
2008 also requests $100 million for the Small Starts program. FTA
officials told us that they requested less than the authorized amounts
for the Small Starts program for both fiscal years 2007 and 2008
because it has taken time for them to establish the program, and
because they did not receive as many Small Starts applications as
expected.
FTA Is Implementing Several Changes to the New Starts Evaluation and
Rating Process:
SAFETEA-LU requires FTA to make several changes to the New Starts
evaluation and rating process, including adding economic development as
an evaluation criterion and changing the rating scale. FTA is in the
process of implementing these changes. For example, table 3 describes
the act's changes to the evaluation and rating process and the status
of their implementation, as of July 2007.
Table 3: Implementation of SAFETEA-LU Changes to the New Starts
Evaluation and Rating Process, as of July 2007:
SAFETEA-LU provision: 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 project-rating scale for
the fiscal years 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): None;
SAFETEA-LU provision: Identify reliability of cost estimate and
ridership forecast as considerations in evaluation process;
Description: The Secretary of Transportation 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 provision: Add economic development criterion to evaluation
process;
Description: Projects will be evaluated on the basis of 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 comments from various parties on the appropriate measures for
economic development;
Remaining action(s): Rulemaking needed to solicit comments on and
finalize measures for economic development;
SAFETEA-LU provision: Identify land use as a specific evaluation
criterion;
Description: Projects will be evaluated on the basis of 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;
Source: GAO analysis of FTA data.
[End of table]
Although FTA has taken steps to implement changes required by SAFETEA-
LU, the project sponsors we interviewed frequently expressed concern
that FTA has not yet fully incorporated economic development into its
evaluation. 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 defined criteria, including
economic development, mobility improvements, operating efficiencies,
and environmental benefits, are not weighted. As described in table 3,
to reflect SAFETEA-LU's increased emphasis on economic development, FTA
has encouraged project sponsors to submit information that they believe
demonstrates the impact of their proposed transit investments on
economic development. According to FTA, this information is considered
as an "other factor" in the evaluation process, but is 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 19] Thus, we recommended that FTA (1) 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 (2) provide a crosswalk in the regulations showing
clear linkages between the criteria outlined in the 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 of the industry groups we
interviewed also stated that they believe certain types of projects are
penalized in the evaluation and rating process because of the weights
assigned to the different evaluation criteria. Specifically, the
project sponsors and industry groups said that by not weighting
economic development, 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 (e.g., 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 (e.g., 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 planning to describe how it will incorporate
economic development into the project justification criteria in its
upcoming rulemaking. FTA officials also stated that incorporating
economic development into the evaluation process before issuing a
regulation could potentially create significant uncertainty about the
evaluation and rating process 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. As part of its upcoming rulemaking, FTA will
also conduct several outreach efforts with project sponsors and
industry groups.
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,
these officials noted that many economic development benefits result
from direct benefits (e.g., travel time savings). Therefore, including
economic development benefits in the evaluation could lead to double-
counting the benefits FTA already measures and uses to evaluate
projects. Furthermore, FTA officials noted that some economic
development impacts may represent transfers between regions, rather
than a net benefit for the nation, thereby raising questions about the
usefulness of these benefits for a national comparison of
projects.[Footnote 20] 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 21] For example, we
noted that certain benefits are often double-counted when
transportation projects are evaluated. We also noted that indirect
benefits, such as economic development, may be more correctly
considered transfers of direct user benefits or of 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 22]
Changes in the Size and Composition of the New Starts Pipeline Are
Likely Due 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
attributed 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 and Funding for 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 one-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 4,
the number of projects that FTA evaluated and rated decreased by about
two-thirds, from 41 projects to 14 projects.
Table 4: Number of Projects in the Pipeline, and Evaluated and Rated,
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] Data include projects that were evaluated and rated for the fiscal
year evaluation cycle as well as "exempt" projects.
[B] Data include projects in final design and preliminary engineering,
both recommended and not recommended, but do not include "exempt"
projects and those categorized by FTA as "not rated."
[End of table]
Although the number of projects in the New Starts pipeline has
decreased, the amount of funding FTA has requested for the program
remained relatively the same, while the average dollar amount per FFGA
has increased since fiscal year 2001. Adjusted to current dollars, FTA
has requested nearly the same funding amounts for the program during
this time frame, having requested $1.22 billion in fiscal year 2001 and
$1.37 billion in fiscal year 2008. Twelve projects were recommended for
FFGAs in fiscal year 2001, while only 2 were recommended for fiscal
year 2008. However, in the fiscal years between 2001 and 2008, the
number of projects recommended for FFGAs varied from as many as 5 to as
few as 2 for any given fiscal year. Furthermore, we found that the
average dollar amount requested for proposed FFGAs has increased since
fiscal year 2001. When adjusted to current dollars, the average dollar
amount of an FFGA proposed in fiscal year 2001 was about $20 million,
but for fiscal year 2008 it was $103 million (see table 5).[Footnote
23]
Table 5: Total Dollar Amounts and Numbers of New Starts FFGAs, by
Fiscal Year:
Amounts in 2007 dollars.
Fiscal year: 2001;
Total number of proposed FFGAs: 12;
Average dollar amount requested per proposed FFGA[A]: $20,338,288.
Fiscal year: 2002;
Total number of proposed FFGAs: 5;
Average dollar amount requested per proposed FFGA[A]: 19,052,155.
Fiscal year: 2003;
Total number of proposed FFGAs: 2;
Average dollar amount requested per proposed FFGA[A]: 30,568,123.
Fiscal year: 2004;
Total number of proposed FFGAs: 4;
Average dollar amount requested per proposed FFGA[A]: 63,658,035.
Fiscal year: 2005;
Total number of proposed FFGAs: 5;
Average dollar amount requested per proposed FFGA[A]: 62,039,958.
Fiscal year: 2006;
Total number of proposed FFGAs: 4;
Average dollar amount requested per proposed FFGA[A]: 150,450,331.
Fiscal year: 2007;
Total number of proposed FFGAs: 5;
Average dollar amount requested per proposed FFGA[A]: 60,520,000.
Fiscal year: 2008;
Total number of proposed FFGAs: 2;
Average dollar amount requested per proposed FFGA[A]: 103,042,198.
Source: GAO analysis of FTA data.
[A] These dollar values are only for the year in which the project was
proposed for an FFGA. Dollar values were adjusted for inflation, using
the gross domestic product (chained) price index, with fiscal year 2007
as the reference year. Dollar values through fiscal year 2006 were
calculated using averages of quarterly indexes from the U.S. Department
of Commerce, Bureau of Economic Analysis, Survey of Current Business,
and National Income and Product Accounts, table 1.1.4 as of January 31,
2007. Dollar values for fiscal years 2007 and 2008 are from
Congressional Budget Office projections, The Budget and Economic
Outlook (Washington, D.C.: January 2007), 136-137.
[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 New Starts pipeline (see fig. 5). The increase in bus
rapid transit projects is likely due to a number of factors, including
foreign countries' positive experiences with this type of transit
system. 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. Furthermore, medium and smaller
project sponsors may be expressing more interest in the New Starts
program, including Small Starts, because bus rapid transit may serve as
a more affordable and cost-effective alternative to other fixed-
guideway options.
Figure 5: Types of Projects in the New Starts Pipeline, by Fiscal Year:
[See PDF for image]
Source: GAO.
[End of figure]
Although bus rapid transit projects are now more common than commuter
or light rail projects, they represent a small amount of the total cost
for all projects in the pipeline. We found that bus rapid transit
accounts for about 12 percent of the total cost of all projects in the
New Starts pipeline, while commuter rail (36 percent), heavy rail (30
percent), and light rail (22 percent) account for greater shares--which
is not surprising, given that bus rapid transit projects are often less
expensive than rail projects. However, although bus rapid transit
projects account for a smaller share of the total costs, we found that
project sponsors seek higher funding shares for these projects. In
fiscal year 2008, project sponsors sought, on average, New Starts
funding to cover about 58 percent of the total cost of bus rapid
transit projects, whereas they sought about 49 percent for commuter
rail projects, about 50 percent for light rail projects, and about 38
percent for heavy rail projects.
FTA and Project Sponsors Attributed the Decrease in the New Starts
Pipeline to Different Factors:
FTA and project sponsors identified different factors 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. According to FTA officials,
these projects consume FTA oversight resources and congressional
funding without demonstrating evidence of progress. FTA officials said
they believed projects had been progressing 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 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
project sponsors. FTA officials told us that project sponsors are
generally aware of FTA's efforts to better manage projects in 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 were withdrawn from the New Starts pipeline between calendar
years 2001 and 2007. Of these, 16 projects were withdrawn from the
pipeline at the request of project sponsors; 6 were removed from the
pipeline in response to efforts initiated by FTA; and 1 was removed
from the pipeline at congressional direction.[Footnote 24] Of the 16
projects that were withdrawn by project sponsors, the most common
reasons were that the project was 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 6 projects for lack of local financial
commitments, 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.
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 were 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--creates 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. Furthermore,
concerns about the cost of applying to the New Starts program come at a
time when project sponsors expect to receive less funding for their
projects from the program. Specifically, for recently completed transit
projects that received an FFGA, the project sponsors we surveyed
reported that, on average, the federal government funded approximately
60 percent of the total project costs via the New Starts program. For
ongoing projects, sponsors reported that they expect to receive an
average of about 50 percent of the total project costs from the New
Starts program.
* Time required to complete the New Starts process: More than one-half
of the project sponsors we interviewed said that the application
process is time-consuming or leads to project delays, although sponsors
could not provide specifics on how long various components of the
process contributed to a specific delay. One project sponsor told us
that constructing a project with New Starts funding (as opposed to
without such funding) delays the timeline for the project by as much as
several years, which in turn leads to increased project costs since
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, as 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. These delays are attributable to the sponsor's inability to obtain
local funding commitments, local decisions to significantly modify the
project's scope or alignment, or unanticipated environmental impacts.
Other reasons for the decrease in the pipeline that were cited by the
project sponsors we interviewed include that the project sponsors are
finding alternative sources of funding, such as other federal funds or
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 New Starts
application process and construct their project more quickly. In
addition, three other project sponsors said that since the New Starts
process is well-established and outcomes are predictable, potential
project sponsors do not even apply to enter the pipeline because they
realize their projects will not fare well against the New Starts
criteria and, thus, are unlikely to receive New Starts funding.
Our survey found similar reasons that project sponsors provided 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
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 funding, yet more than one-fourth of them did not apply
to the program.[Footnote 25] Instead, these project sponsors reported
using other federal funding and state, local, and private funding--with
other federal and local funding the most commonly used and private
funding the least commonly used--to fund their most recently completed
project. In addition, we found that almost two-thirds of the large
project sponsors we surveyed applied to the New Starts program for
their most recently completed project, while only about one-third of
medium and smaller project sponsors applied.[Footnote 26] Other reasons
these project sponsors cited for not applying to the program include
sufficient funding from other sources to complete the project, concern
about jeopardizing other projects in the pipeline, time and resources
needed to complete application each year are too great, and difficulty
in understanding and completing the process and in understanding the
program's eligibility requirements.
FTA is considering and implementing different means of improving 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 its
implementation of the New Starts program. According to FTA officials,
one of the study's recommendations was to use project development
agreements to solidify New Starts project schedules and improve FTA's
timeline for reviews. FTA officials told us that they are pursuing this
recommendation, and have already implemented project schedules for
three New Starts projects in the pipeline. Other key recommendations
for FTA contained in the study include developing a simple "road map"
that concisely identifies requirements for navigating through
preliminary engineering and final design, more clearly defining entry
criteria for each phase of the process, simplifying the travel
forecasting modeling, and clarifying and consistently implementing the
New Starts technical guidance and policies. The FTA Administrator has
publicly stated that FTA will continue to look for ways to further
improve the program.
In June 2007, FTA issued in the Federal Register a number of changes to
the New Starts and Small Starts processes, including streamlining
through the elimination of a number of reporting requirements. For
example, FTA will no longer require project sponsors to submit
information on operating efficiencies and environmental benefits, nor
will they be required to submit information for evaluation for FTA's
annual report if their project is not likely to be ready for a funding
recommendation. In addition, the resubmission of information on land-
use patterns for the annual report will now be optional for project
sponsors. Other changes to the processes include expanding the
evaluation criteria to a five-tiered rating scale, and considering a
project's innovative contractual agreements in the evaluation and
rating of the operating finance plan for projects. The guidance also
states that under the evaluation of "other factors," if a project is a
principal element of a congestion management strategy, this could
increase a project's overall rating. Projects could also increase their
overall rating by reporting economic development; therefore, FTA
encourages project sponsors to submit such information.
Future Demand for New Starts Program Expected; Project Sponsors Seek
Small Starts Program Improvements:
Our survey and interviews of project sponsors indicated that there will
likely be a future demand for New Starts funding. Survey respondents
told us that they plan to seek New Starts funding for 101 of 141 future
planned New Starts, Small Starts, and Very Small Starts transit
projects. While FTA has taken steps to streamline the Small Starts
program as envisioned by SAFETEA-LU, project sponsors find the
application process to be time-consuming and too costly to complete. In
addition, project sponsors we interviewed, especially those that have
never applied for New Starts funding, find the Small Starts interim
guidance difficult to understand and would like more assistance from
FTA on how to complete the application process.
Project Sponsors Indicated That Future Demand for New Starts Funding Is
Likely:
Our survey of project sponsors indicated that there is likely to be a
future demand for New Starts funding. About 46 percent (77 of 168) of
the project sponsors we surveyed reported that they had a total of 141
planned transit projects, which we defined as projects currently
undergoing an alternatives analysis or other corridor-based planning
study. According to the project sponsors, they will likely seek New
Starts funding for almost three-fourths (72 percent, or 101) of these
141 planned New Starts, Small Starts, and Very Small Starts projects.
More specifically, they will likely seek New Starts funding for 57 of
the planned New Starts projects, 30 of the planned Small Starts
projects, and 14 of the planned Very Small Starts projects (see fig.
6).[Footnote 27] Although the project sponsors we surveyed indicated
that they were considering a range of alternative project types in
their planning, the most commonly cited alternatives were bus rapid
transit and light rail.
Figure 6: Project Sponsors' Expected Use of New Starts Funding for
Planned New Starts, Small Starts, and Very Small Starts Projects:
[See PDF for image]
Source: GAO.
Note: "Other" refers to the project sponsors we surveyed that selected
"None of the above" in response to the type of federal funding, if any,
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 viewed the new Small Starts program favorably. These
project sponsors told us that they appreciated 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
program, including the Very Small Starts eligibility category, address
a critical and unmet funding need, and that they believe their projects
will be more competitive under these programs because they are vying
for funding with projects and agencies of similar size. FTA officials
told us that they have been responsive in providing assistance on the
program when contacted.
Our survey results also indicated that, through its Small Starts
program, FTA is attracting more project sponsors than before, including
those that have not previously applied for the New Starts program and
also those that would not otherwise be applying for New Starts funds.
For example, of the 30 project sponsors that intend to seek New Starts
funding for their planned Small Starts and Very Small Starts
projects,[Footnote 28] 13 have not previously applied for New Starts
funding.[Footnote 29] Project sponsors also indicated that the Small
Starts program, including the eligibility category for Very Small
Starts projects, has influenced how they plan for their ongoing
projects, which are projects that have completed the alternatives
analysis phase and have moved forward into the later stages of
development, such as preliminary engineering or final design. Of the
ongoing Small Starts and Very Small Starts projects for which
respondents indicated they would be requesting New Starts funding,
project sponsors definitively reported that they would have sought New
Starts funding for only about one-quarter of those ongoing projects if
the Small Starts program, including the eligibility category for Very
Small Starts projects, had not been established.
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 processes for
smaller-scale transit projects, as envisioned by SAFETEA-LU. According
to our analysis of the numbers 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
number of requirements was reduced. FTA also established a simplified
financial evaluation process for Small Starts, which reduced the
reporting burden for qualified projects. In addition, FTA allows
simplified methods for travel forecasts that predict transportation
benefits, and it reduced the number of requirements for the Small
Starts application process. For example, the Small Starts application
process is about one-quarter fewer requirements than those for the New
Starts program. FTA also established the Very Small Starts process,
which has even fewer application requirements than the Small Starts
program. This process expedites the reporting, evaluation, and
advancement of simple and inexpensive projects. FTA's steps have
greatly reduced the amount of information to be submitted for each of
the specific requirements (see table 6).
Table 6: New Starts, Small Starts, and Very Small Starts Application
Requirements:
Category of reporting requirements: Project background and maps;
Number of reporting requirements, by project type: New Starts: 3;
Number of reporting requirements, by project type: Small Starts: 3;
Number of reporting requirements, by project type: Very Small Starts:
4;
Category of reporting requirements: Travel forecasts;
Number of reporting requirements, by project type: New Starts: 7;
Number of reporting requirements, by project type: Small Starts: 7[A];
Number of reporting requirements, by project type: Very Small Starts:
0;
Category of reporting requirements: Costs (operations, maintenance, and
capital);
Number of reporting requirements, by project type: New Starts: 7;
Number of reporting requirements, by project type: Small Starts: 5;
Number of reporting requirements, by project type: Very Small Starts:
5;
Category of reporting requirements: Project justification criteria;
Number of reporting requirements, by project type: New Starts: 12;
Number of reporting requirements, by project type: Small Starts: 6[A];
Number of reporting requirements, by project type: Very Small Starts:
1[A];
Category of reporting requirements: Local financial commitment; Number
of reporting requirements, by project type: New Starts: 4; Number of
reporting requirements, by project type: Small Starts: 3[A]; Number of
reporting requirements, by project type: Very Small Starts: 3;
Category of reporting requirements: Certification of technical methods
and planning assumptions;
Number of reporting requirements, by project type: New Starts: 1;
Number of reporting requirements, by project type: Small Starts: 1;
Number of reporting requirements, by project type: Very Small Starts:
0;
Category of reporting requirements: Make-the-case document;
Number of reporting requirements, by project type: New Starts: 1;
Number of reporting requirements, by project type: Small Starts: 1;
Number of reporting requirements, by project type: Very Small Starts:
1;
Category of reporting requirements: Total;
Number of reporting requirements, by project type: New Starts: 35;
Number of reporting requirements, by project type: Small Starts: 26;
Number of reporting requirements, by project type: Very Small Starts:
14;
Source: GAO analysis of the New Starts, Small Starts, and Very Small
Starts application requirements.
[A] Data indicate that in this category, whether the number of
requirements has remained the same or decreased, FTA has greatly
reduced the amount of information to be submitted for each specific
requirement. For example, in the travel forecast category, both the New
Starts and Small Starts programs have seven application requirements,
but the Small Starts program requires substantially less information
for each requirement.
[End of table]
Despite these efforts, many of the project sponsors we interviewed find
the Small Starts application process time-consuming and too 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 that applied to the Small Starts
program told us that FTA asks applicants to submit templates used in
the New Starts application process that call for information not
relevant for a Small Starts project, such as travel forecasts beyond
the opening year, which are not required for the Small Starts program.
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 multiyear ridership projections. Such extensive
ridership projections take a considerable amount of work, staff time,
and funding to produce. FTA officials explained to us that the level of
ridership projections required is dependent on the nature of the
project. Several other project sponsors that applied to the Small
Starts program, including sponsors that used the Very Small Starts
process, 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 project
sponsors to submit. Nonetheless, smaller-sized entities that lack New
Starts experience, in-house expertise, and resources may find the
process burdensome.
In reviewing the Small Starts application process requirements, we also
found that the application is not always 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 said that they are working to decrease
the burden by, for example, reducing land-use reporting requirements,
simplifying the rating process, and developing specific Small Starts
templates. However, FTA officials noted that some requirements are
statutorily defined or reflect industry-established planning
principles. For example, federal statute requires that projects, even
Small Starts projects, emerge from an alternatives analysis that
considers various options to address the transportation problem at
hand. Therefore, only certain aspects of the process can be
streamlined.
Project Sponsors Seek Additional Application Assistance and Consistent
Information from FTA on Small Starts:
The project sponsors we interviewed, especially those that have never
applied for New Starts funding, would like more assistance from FTA in
completing the application process because some find the interim
guidance difficult to understand. Before the Small Starts and Very
Small Starts application deadline, FTA provided initial outreach to
applicants. Despite this outreach, 8 of the 12 applications were
incomplete or sought funding for ineligible projects. In some cases,
the project sponsors that submitted these applications had no past
experience with the New Starts process, limiting their familiarity with
the information required for the application. To help address this
issue, FTA officials told us that, in one instance, they provided a
Very Small Starts project sponsor with a copy of a submitted
application from another project sponsor (with New Starts program
experience) to use as a guide. The Very Small Starts project sponsor
found the application to be helpful in preparing its own application.
FTA officials told us that they plan to host an informal meeting of
potential Small Starts project sponsors later this calendar year. In
addition, some project sponsors did not understand what constitutes an
eligible project. For example, one project sponsor we interviewed
submitted an application for the construction of a new station.
However, FTA officials told us that the construction of a station did
not meet the definition of a corridor-based project, as required.
Another project sponsor we interviewed told us that it believed FTA
deemed its two Small Starts and Very Small Starts projects ineligible
because service was already being provided on the proposed route (and,
therefore, the proposed service would not be new). In response, FTA
officials told us that these projects were in fact ineligible because
they already had incremental developments, including some of the
elements FTA requires for Small Starts and Very Small Starts projects,
such as traffic signal priority or preemption and branding of the
proposed service. Yet, these project sponsors were unaware that the
incorporation of some of these elements into their existing service
rendered their project ineligible.[Footnote 30] We found that although
FTA's Small Starts guidance outlines the elements required for a
project to receive funding, it does not explicitly state that projects
that have already begun to incrementally incorporate these elements are
ineligible. When we discussed this concern with FTA officials, they
told us that they might consider asking project sponsors to demonstrate
the cost-effectiveness of the preexisting elements to allow for such
projects to be eligible for Small Starts funding.
The project sponsors we interviewed said they need more consistent,
reliable information from FTA. We found that on several occasions, FTA
headquarters and regional offices provided project sponsors with
inconsistent information, which contributed to the sponsors' submitting
applications for ineligible projects and submitting incomplete
applications. For example, two project sponsors said they thought their
projects were eligible after talking with FTA regional officials.
However, after submitting their applications, these project sponsors
learned from FTA headquarters officials that their projects were
ineligible. Furthermore, one project sponsor stated that officials from
a regional FTA office said there was no need to submit a separate
application for the Small Starts program, since the sponsor had
previously applied to the New Starts program. Rather, FTA regional
officials said the project sponsor needed to submit only a few
additional pieces of information. However, after the project sponsor
sent this information, along with a letter to FTA requesting that the
application be transferred from the New Starts program to the Small
Starts program, FTA headquarters officials responded that the
application was incomplete. The study of the New Starts process that
FTA recently commissioned found similar inconsistencies in the
information provided by officials in its regional offices and
headquarters. Therefore, the study recommended that FTA develop
internal standard operating procedures for New Starts staff that
formalize the duties and responsibilities for each position. In
addition, the study recommended implementing Web-based technology to
standardize the communication and enforcement of policies across the
program, and having FTA establish a formal policy for responding to
every project sponsor's correspondence with a formal response or
written notification. FTA officials told us that they understand the
need to ensure consistent information, and that they are already
working on developing standard operating procedures for New Starts
staff, as recommended in the study.
Conclusions:
The recent decrease in the New Starts pipeline does not appear to be a
reflection of diminishing interest in the program. In fact, our survey
showed that there will likely be substantial demand for New Starts
funding in the future if most potential project sponsors follow through
on their plans for new transit projects. Rather, the decrease is likely
due to a combination of factors, including FTA's increased scrutiny of
projects, project sponsors' perceptions of the process as lengthy and
too complex, and project sponsors' uncertainty given the recent changes
made to the New Starts program. As FTA moves forward with the
rulemaking process for New Starts and Small Starts, it will have to
balance both the need to make the programs accessible to a range of
project sponsors--both large and small agencies--and the need to
maintain the rigor of the evaluation and rating process.
Although project sponsors expressed substantial interest in both the
New Starts and the Small Starts programs, they also identified a number
of ways to improve the programs. In particular, project sponsors raised
specific concerns about the Small Starts program. Because the Small
Starts program is in its first few years of implementation, it is not
surprising that it may experience growing pains. Some of the project
sponsors may find their concerns about the program addressed as they
become more familiar and comfortable with it and as a number of
implementation details are finalized through the upcoming rulemaking
process. However, we believe that the relatively low number of Small
Starts applications received to date and the number of project sponsors
submitting ineligible applications due to unclear guidance suggest that
additional FTA action is warranted, including further streamlining the
Small Starts program, providing additional information about the
program through training and a working group, and clarifying
eligibility guidance. Although FTA has taken some steps to further
streamline the Small Starts program, continued refinement is needed to
ensure a simplified and expedited evaluation process. FTA's upcoming
rulemaking, including the associated outreach efforts, will provide an
opportunity for FTA to continue to streamline the Small Starts program,
provide additional training, and clarify guidance.
Recommendations for Executive Action:
To improve the Small Starts program, we are recommending that the
Secretary of Transportation direct the FTA Administrator to take the
following three actions:
* To increase awareness and information sharing about the Small Starts,
including Very Small Starts, application process, FTA should conduct
training (in-person, Web-based, or both) for potential applicants and
facilitate the development of a working group or community of practice.
* To ensure that project sponsors better understand the types of
corridor bus projects that are eligible for Small Starts funding, FTA
should clarify in its Small Starts program guidance that bus rapid
transit projects cannot already include any of the required elements
for eligibility, or if they do, must demonstrate the cost-effectiveness
of the preexisting elements.
* To ensure that the Small Starts program provides a streamlined
application process as envisioned by SAFETEA-LU, FTA should continue to
refine this process as outlined in the Small Starts program guidance.
Examples of refinements include collapsing the project finance or cost
worksheets to minimize the duplication of data to be submitted and
providing specific guidance on how, when applicable, Small Starts
applicants can conduct a simplified alternatives analysis.
Agency Comments:
We provided DOT, including FTA, with a draft copy of this report for
review and comment. DOT generally agreed with the report's findings and
conclusions, and agreed to consider our recommendations. DOT also
provided technical clarifications, which we incorporated as
appropriate.
We are sending copies of this report to the congressional committees
with responsibilities for transit issues; the Secretary of
Transportation; the Administrator, Federal Transit Administration; and
the Director, Office of Management and Budget. We also will make copies
available to others upon request. In addition, this report will be
available at no charge on GAO's Web site at [hyperlink,
http://www.gao.gov].
If you or your staff have any questions on matters discussed in this
report, please contact me on (202) 512-2834 or at siggerudk@gao.gov.
Contact points for our Offices of Congressional Relations and Public
Affairs may be found on the last page of this report. Individuals
making key contributions to this report are listed in appendix II.
Katherine Siggerud Director,
Physical Infrastructure Issues;
[End of section]
Appendix I: Scope and Methodology;
To address our objectives, we reviewed the Federal Transit
Administration's (FTA) guidance on the New Starts and Small Starts
programs; the Advanced Notice of Proposed Rule Making for Small Starts;
and the provisions of the Safe, Accountable, Flexible, Efficient
Transportation Equity Act: A Legacy for Users and prior law that
address the New Starts program. We reviewed this legislation to
identify changes that have occurred in the New Starts program and to
gather information on FTA's new Small Starts program, which we used, in
part, to analyze the quantitative differences in application
requirements between this program and the New Starts program.
Furthermore, we reviewed the FTA's Annual Reports on New Starts for
fiscal years 2001 through 2008 to determine trends in the New Starts
pipeline (those projects in preliminary engineering and final design)
for each year, including the number of projects evaluated, rated, and
recommended for funding; the modes of projects in the pipeline; and the
amount of New Starts funding requested for projects, and the total
costs of proposed projects.
We also interviewed FTA officials and industry associations to gain
their insights on past, current, and future aspects of the programs. We
interviewed FTA officials who work extensively with the New Starts and
Small Starts programs to gain a better understanding of the programs.
In addition, we interviewed three industry associations that represent
project sponsors that participate closely in these programs: the
American Public Transportation Association, the New Starts Working
Group, and Reconnecting America. Furthermore, we attended an American
Public Transportation Association legislative workshop to learn about
the New Starts and Small Starts programs, including New Starts project
planning and evaluation process, and Small Starts interim guidance and
rulemaking.
We also interviewed 15 project sponsors, including all 10 sponsors that
applied for the Small Starts program (including Very Small Starts
applicants) for the fiscal year 2008 evaluation cycle. We interviewed
the project sponsors to gather information on their past experiences
with the New Starts and Small Starts programs, and their potential
future use of these programs. The 10 project sponsors we interviewed
that applied for the fiscal year 2008 Small Starts program (including
Very Small Starts applicants) included the City of Breckenridge Public
Works Department (Breckenridge, Colorado); Dallas County Utility and
Reclamation District (Irving, Texas); Fort Collins Transportation
Department (Fort Collins, Colorado); Kansas City Area Transportation
Authority (Kansas City, Missouri); King County Metro (King County,
Washington); Lane Transit District (Springfield, Oregon); Los Angeles
County Metropolitan Transit Authority (Los Angeles, California);
Northern Arizona Intergovernmental Public Transportation Authority
(Flagstaff, Arizona); Sarasota County Area Transit (Sarasota County,
Florida); and Sound Transit (Seattle, Washington). In addition, we
interviewed 5 other project sponsors that varied in their levels of
experience with the New Starts program, size, and regional location.
These 5 sponsors were the Metropolitan Transit Authority of Harris
County (Houston, Texas); New Jersey Transit Corporation (Newark, New
Jersey); Orange County Transit Authority (Orange County, California);
St. Louis Regional Transit (St. Louis, Missouri); and TriMet (Portland,
Oregon).
To further address our objectives, we used a Web-based questionnaire to
survey all of the project sponsors that are located in an urbanized
area with a population of over 200,000 and have an annual ridership of
over 1 million. These project sponsors may or may not have previously
applied to the New Starts or Small Starts programs, but because of
their size and ridership, they would be more likely to plan the types
of transit projects that would potentially qualify for New Starts
funding. Project sponsors were defined typically as transit agencies,
but they may also have included city transportation offices and
metropolitan planning organizations, among other entities.
The questionnaire to project sponsors asked questions that allowed for
a combination of open-ended and closed-ended responses. The
questionnaire included questions about project sponsors' (1) current
transit situation, (2) most recently completed transit projects, (3)
current ongoing transit projects, and (4) future planned transit
projects. For each question, we asked the project sponsors about the
types of transit project they sponsored, how they funded or intended to
fund transit projects in the future, and their experiences with and
perceptions of the various programs.
The questionnaire was designed by a GAO survey specialist in
conjunction with other GAO staff knowledgeable about the grant program.
We pretested the questionnaire with 5 project sponsors that had varying
levels of experience in working with the New Starts program. Three
project sponsors had previously applied to either the New Starts
program or the Small Starts program, while 1 project sponsor had not
applied to either program. In addition, the 5 project sponsors
represented both larger and smaller project sponsors included in our
list of the 215 largest transit agencies. The 5 project sponsors were
the Fort Collins Transportation Department (Fort Collins, Colorado);
Maryland Transit Administration (Baltimore, Maryland); Rockford Mass
Transit District (Rockford, Illinois); TriMet (Portland, Oregon); and
Washington Metropolitan Area Transit Authority (Washington, D.C.)
Furthermore, we asked two industry groups (the American Public
Transportation Association and the New Starts Working Group) and FTA to
review the project sponsor questionnaire and provide comments. During
the pretests and reviews of the questionnaire, we asked the project
sponsors and industry groups whether the questions were understandable
and if the information was feasible to collect. We refined each of the
questions as appropriate in response to the feedback we received.
To conduct the questionnaire, we posted self-administered electronic
questionnaires to the World Wide Web and sent e-mail notifications to
project sponsor contacts provided to us by FTA in early February 2007.
We found after our first e-mail that some addresses were no longer
valid, so we contacted each agency by telephone to find the appropriate
contact to send the e-mail notification. We also responded to inquiries
from project sponsors. Many project sponsor contacts believed they were
not the right person to answer the questions. In these instances, we
resent the e-mail notification to the correct contact at the project
sponsor. Our goal was to find the staff member at each project sponsor
who was the most knowledgeable about the New Starts program and the
Small Starts program.
After determining the correct contact, we e-mailed each potential
respondent a unique username and password to ensure that the project
sponsor would have access to the questionnaire. We asked the project
sponsor contact to complete the questionnaire within 2 weeks. To
encourage respondents to complete the questionnaire, we sent an e-mail
message to prompt each nonrespondent every 2 weeks after the initial e-
mail message for approximately 6 weeks. After 6 weeks, we called all
nonrespondents at least once to encourage their participation in the
questionnaire and to increase our response rate. We closed the
questionnaire on May 11, 2007. In total, we surveyed 215 project
sponsors and received responses from 168 of them, for a response rate
of 78 percent. To view our questionnaire and the aggregated project
sponsor responses, go to [hyperlink, http://www.gao.gov/cgi-
bin/getrpt?GAO-07-927SP].
Because the questionnaire was not a sample survey, it has no sampling
errors. However, the practical difficulties of conducting any survey
may introduce errors, commonly referred to as "nonsampling" errors. For
example, difficulties in how a particular question is interpreted, in
the sources of information available to the respondents, or in how the
data are entered into a database or were analyzed can introduce
unwanted variability into the questionnaire results. We took steps in
developing the questionnaire, collecting the data, and analyzing the
data to minimize these nonsampling errors. For example, as we have
previously noted, our survey specialists designed the questionnaire in
collaboration with GAO subject matter experts, and we pretested the
draft questionnaire with the appropriate officials to ensure that the
questions were relevant, clearly stated, and easy to comprehend. After
the data were analyzed, a second, independent analyst checked all
computer programs. Since this was a Web-based questionnaire, the
respondents entered their answers directly into the electronic
questionnaire, eliminating the need to have the data keyed into a
database, thereby removing an additional potential source of error.
We performed our work from November 2006 through July 2007 in
accordance with generally accepted government auditing standards.
[End of section]
Appendix II: GAO Contact and Staff Acknowledgments;
GAO Contact:
Katherine Siggerud, (202) 512-2834, siggerudk@gao.gov:
Staff Acknowledgments:
In addition to the individual named above, other key contributors to
this report were 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: Preliminary Analysis of Changes to and Trends in
FTA's New Starts and Small Starts Programs. GAO-07-812T. Washington,
D.C.: May 10, 2007.
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.
[End of Section]
FOOTNOTES
[1] Fixed-guideway systems use and occupy a separate right-of-way for
the exclusive use of public transportation services. These fixed-
guideway systems include fixed rail, exclusive lanes for buses and
other high-occupancy vehicles, and other systems.
[2] Although SAFETEA-LU did not create a separate Small Starts program,
it established various requirements to be applied to projects receiving
capital investment grants of less than $75 million and where the total
estimated net capital cost of the project is less than $250 million.
FTA consistently refers to this authority as the Small Starts program
in its regulations, annual report, and guidance. Thus, for the purposes
of this report, we refer to Small Starts as a program. Safe,
Accountable, Flexible, Efficient Transportation Equity Act: A Legacy
for Users, Pub. L. No. 109-59, title III, § 3011, 119 Stat. 1573
(2005), codified as positive law at 49 U.S.C. § 3509. See, in
particular, 49 U.S.C. § 3509(e).
[3] Transit projects that qualify for the Small Starts program are
referred to as "Small Starts projects" in this report as well as in
FTA's guidance and reports. Transit projects that do not qualify for
the Small Starts program because they request more federal funding, or
are larger in scope, than is permitted by 49 U.S.C. § 5309(e) are
referred to as "New Starts projects." Thus, in this report, we use the
term "New Starts" in two contexts: (1) to identify projects that are
larger in scope than is permitted by 49 U.S.C. § 5309(e) and (2) as a
reference to the entire capital investment grants program that is
subject to 49 U.S.C. § 5309(d) or (e). As used in this report, "New
Starts projects" refer to projects that do not qualify as Small Starts,
while "New Starts program," "New Starts funding," and "New Starts
pipeline" refer generally to the capital investment grants program.
[4] 49 U.S.C. § 5309(k)(2).
[5] Project sponsors that we surveyed may or may not have previously
applied to the New Starts program, but because of their size and
ridership, these sponsors 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 they 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.
[6] GAO, Preliminary Analysis of Changes to and Trends in FTA's New
Starts and Small Starts Programs, GAO-07-812T (Washington, D.C.: May
10, 2007).
[7] Projects with pending FFGAs were previously recommended for FFGAs
by FTA; however, FFGAs have not been executed. FTA expects to execute
both pending FFGAs by the end of fiscal year 2007.
[8] 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.
[9] An alternatives analysis (also known as a major investment study or
a multimodal corridor analysis) is conducted to evaluate a range of
transportation alternatives (including the appropriate modal and
alignment options) developed to address transportation problems and
mobility needs in a given corridor. The alternatives analysis 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.
[10] Thirty project sponsors that responded to our survey intend to
seek New Starts funding for their planned Small Starts or Very Small
Starts projects. However, 2 of those sponsors did not answer whether
they had previously applied for any New Starts funding.
[11] 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 impacts
(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 phase. Some federal New
Starts funding is available to projects for preliminary engineering
activities, if so appropriated by Congress.
[12] 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.
[13] The exceptions to the evaluation process are statutorily "exempt"
projects, which are those projects 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 the sponsors to do so). FTA does not rate these projects. 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.
[14] 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.
[15] The fixed-guideway portion need not be contiguous, but it should
be located to result in faster and more reliable running times.
[16] In comparison, 20 projects were evaluated and rated in the fiscal
year 2007 evaluation cycle, with 1 rated as "high," 17 as "medium," and
2 as "low."
[17] In its annual report, FTA stated that 3 of these "other" projects
are expected to be in final design by spring 2007, assuming
satisfactory resolution of any outstanding issues. FTA also stated that
the remaining 3 "other" projects are in final design, but because of
uncertainties related to their scopes, schedules, and/or budgets, FTA
lacked confidence--at the time the administration was preparing its
fiscal year 2008 budget proposal--that the projects would maintain
their "medium" rating and/or achieve the necessary cost-effectiveness
rating to be recommended for an FFGA.
[18] Portland, Oregon, submitted an application for a Small Starts
project in early 2007. The application was for a $151 million streetcar
project. However, the application was submitted after FTA's deadline
for inclusion in its fiscal year 2008 New Starts annual report.
Therefore, we did not include this project in our review.
[19] 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).
[20] Indirect benefits, such as economic development, may represent
transfers of economic activity from one area to another. 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.
[21] 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).
[22] GAO-05-172.
[23] FTA officials told us that although the dollars per project have
increased over time, the share or percentage of New Starts funding per
project has decreased. We did not verify this information.
[24] The 16 projects withdrawn by their sponsors and the 6 projects
withdrawn by FTA include the 7 projects that received a warning and
were subsequently withdrawn from the pipeline by the project sponsors
or FTA.
[25] 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.
[26] For the purposes of our survey, we defined "small project
sponsors" as those with an annual ridership of less than 10 million
trips; "medium project sponsors" as those with an annual ridership of
between 10 and 50 million trips, inclusive; and "large project
sponsors" as those with an annual ridership of more than 50 million
trips.
[27] For the remaining 40 planned transit projects, respondents said
either that they were not planning to apply for New Starts funding, or
that they did not know whether they planned to apply.
[28] Planned projects are in the earliest stages of development (i.e.,
alternatives analysis or a similar corridor-based planning study). The
30 project sponsors that responded to our survey intend to seek New
Starts funding for their planned Small Starts or Very Small Starts
projects. However, 2 of those sponsors did not answer whether they had
previously applied for New Starts funding.
[29] These projects may or may not currently be in FTA's pipeline of
New Starts or Small Starts projects.
[30] According to FTA's guidance, Small Starts projects must (1) meet
the definition of a fixed guideway for at least 50 percent of the
project length in the peak period, (2) be a fixed-guideway project, or
(3) be a corridor-based bus project with the following minimum
elements: substantial transit stations; traffic signal priority or
preemption, 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 and 15-minute off-peak running
times (i.e., headways) or better while operating at least 14 hours per
weekday.
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