Urban Partnership Agreements
Congestion Relief Initiative Holds Promise; Some Improvements Needed in Selection Process Gao ID: GAO-09-154 March 25, 2009As part of a broad congestion relief initiative, the Department of Transportation awarded about $848 million from 10 grant programs to five cities (Miami, Minneapolis, New York, San Francisco, and Seattle) in 2007 as part of the Urban Partnership Agreements (UPA) initiative. The UPA initiative is intended to demonstrate the feasibility and benefits of comprehensive, integrated, and innovative approaches to relieving congestion, including the use of tolling (congestion pricing), transit, technology, and telecommuting (4Ts). Congestion pricing involves charging drivers a fee that varies with the density of traffic. This report addresses congressional interest in (1) how well the department communicated UPA selection criteria, (2) whether it had discretion to allocate grant funds to UPA recipients and consider congestion pricing as a priority selection factor, and (3) how it is ensuring that UPA award conditions are met and results are assessed. GAO reviewed departmental documents, statutes and case law, and interviewed department officials and UPA applicants.
Although GAO did not assess the merits of the UPA initiative's design, it has reported on its support for integrated approaches to help reduce congestion. With minor exception, the department did a good job communicating the criteria it would use to select urban partners and how much funding was available, but it did not clearly communicate the relative priority of the criteria or extend the same outreach to all applicants. The department clearly communicated 10 of the 11 selection criteria--such as the political and technical feasibility of projects--that it used to decide which cities to select as urban partners, but it did not publicize which criteria, other than the 4Ts, were most important. In addition, over time, the department provided information indicating that about $852 million was available for these projects--a figure short of the actual $1.02 billion but sufficient to give applicants a rough idea of the program's size. Clearly communicating selection criteria, their relative priority, and the available funding allows applicants to make informed decisions when preparing their applications. GAO also found that the department told two semifinalists for being named urban partners how to revise their applications to make them more competitive, but did not do so for the other semifinalists. Both were ultimately selected as urban partners. However, in the absence of government-wide or departmental guidance, it is unclear how to assess the appropriateness of this assistance. The department acted within its authority to allocate about $848 million of its fiscal year 2007 appropriation under 10 grant programs to five UPA cities. Typically these funds have been awarded through congressional direction (earmarks) to thousands of jurisdictions; but the department's 2007 funds were not subject to such directives. In addition, the department had authority to consider congestion pricing as a priority selection factor when awarding funds because the underlying statutes either explicitly permit it or provide the department with the authority to do so. However, GAO found that the department likely did not comply with statutory requirements of the Transportation, Community, and System Preservation program by failing to require applicants to meet all five statutory factors in order to receive "priority consideration," but this may not have affected the selection outcome. The department has developed a framework to ensure that UPA award conditions are met and the initiative's results will be evaluated. The department is monitoring urban partners' completion of award conditions, such as obtaining congestion-pricing authority, and has already acted when conditions have not been met, such as by taking away New York City's funding when it could not obtain congestion pricing authority from the state. In addition, the department plans to evaluate urban partners' strategies for, and results in, reducing congestion. The evaluation, to be conducted by To view the full product, including the scope Battelle Memorial Institute, is in its early stages.
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-09-154, Urban Partnership Agreements: Congestion Relief Initiative Holds Promise; Some Improvements Needed in Selection Process
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Report to Congressional Committees:
United States Government Accountability Office:
GAO:
March 2009:
Urban Partnership Agreements:
Congestion Relief Initiative Holds Promise; Some Improvements Needed in
Selection Process:
GAO-09-154:
GAO Highlights:
Highlights of GAO-09-154, a report to congressional committees.
Why GAO Did This Study:
As part of a broad congestion relief initiative, the Department of
Transportation awarded about $848 million from 10 grant programs to
five cities (Miami, Minneapolis, New York, San Francisco, and Seattle)
in 2007 as part of the Urban Partnership Agreements (UPA) initiative.
The UPA initiative is intended to demonstrate the feasibility and
benefits of comprehensive, integrated, and innovative approaches to
relieving congestion, including the use of tolling (congestion
pricing), transit, technology, and telecommuting (4Ts). Congestion
pricing involves charging drivers a fee that varies with the density of
traffic.
This report addresses congressional interest in (1) how well the
department communicated UPA selection criteria, (2) whether it had
discretion to allocate grant funds to UPA recipients and consider
congestion pricing as a priority selection factor, and (3) how it is
ensuring that UPA award conditions are met and results are assessed.
GAO reviewed departmental documents, statutes and case law, and
interviewed department officials and UPA applicants.
What GAO Found:
Although GAO did not assess the merits of the UPA initiative‘s design,
it has reported on its support for integrated approaches to help reduce
congestion.
With minor exception, the department did a good job communicating the
criteria it would use to select urban partners and how much funding was
available, but it did not clearly communicate the relative priority of
the criteria or extend the same outreach to all applicants. The
department clearly communicated 10 of the 11 selection criteria”such as
the political and technical feasibility of projects”that it used to
decide which cities to select as urban partners, but it did not
publicize which criteria, other than the 4Ts, were most important. In
addition, over time, the department provided information indicating
that about $852 million was available for these projects”a figure short
of the actual $1.02 billion but sufficient to give applicants a rough
idea of the program‘s size. Clearly communicating selection criteria,
their relative priority, and the available funding allows applicants to
make informed decisions when preparing their applications. GAO also
found that the department told two semifinalists for being named urban
partners how to revise their applications to make them more
competitive, but did not do so for the other semifinalists. Both were
ultimately selected as urban partners. However, in the absence of
government-wide or departmental guidance, it is unclear how to assess
the appropriateness of this assistance.
The department acted within its authority to allocate about $848
million of its fiscal year 2007 appropriation under 10 grant programs
to five UPA cities. Typically these funds have been awarded through
congressional direction (earmarks) to thousands of jurisdictions; but
the department‘s 2007 funds were not subject to such directives. In
addition, the department had authority to consider congestion pricing
as a priority selection factor when awarding funds because the
underlying statutes either explicitly permit it or provide the
department with the authority to do so. However, GAO found that the
department likely did not comply with statutory requirements of the
Transportation, Community, and System Preservation program by failing
to require applicants to meet all five statutory factors in order to
receive ’priority consideration,“ but this may not have affected the
selection outcome.
The department has developed a framework to ensure that UPA award
conditions are met and the initiative‘s results will be evaluated. The
department is monitoring urban partners‘ completion of award
conditions, such as obtaining congestion-pricing authority, and has
already acted when conditions have not been met, such as by taking away
New York City‘s funding when it could not obtain congestion pricing
authority from the state. In addition, the department plans to evaluate
urban partners‘ strategies for, and results in, reducing congestion.
The evaluation, to be conducted by Battelle Memorial Institute, is in
its early stages.
What GAO Recommends:
The department should provide applicants with information about
selection criteria in similar initiatives and follow statutory priority
consideration of grant selection factors. For the most part, the
department agreed with the draft report and agreed to consider its
recommendations.
To view the full product, including the scope and methodology, click on
[hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-09-154]. For more
information, contact Katherine A. Siggerud at (202) 512-2834 or
siggerudk@gao.gov and Susan Sawtelle at (202) 512-6417 or
sawtelles@gao.gov.
[End of section]
Contents:
Letter:
Results in Brief:
Background:
The Department Communicated Most Selection Information to Applicants,
but Gave Two Applicants Assistance over Others:
The Department Had the Authority to Allocate Funds to the UPA
Initiative, and to Consider Congestion Pricing as a Priority Selection
Factor for Underlying Grant Programs:
The Department Has a Framework to Ensure That Award Conditions Are
Being Met and That Results Will Be Evaluated:
Conclusions:
Recommendations for Executive Action:
Agency Comments and Our Evaluation:
Appendix I: Department of Transportation Actions to Select Corridors of
the Future and Ensure Transportation Benefits:
Appendix II: The Department Actively Promotes Public-Private
Partnerships to Reduce Highway Congestion:
Appendix III: Extent to Which Previous Recipients of Grant Programs
Received UPA Initiative and Corridors Funding:
Appendix IV: Scope and Methodology:
Appendix V: The Department's Legal Compliance in Awarding Grants to
Support the UPA Initiative:
Appendix VI: GAO Contacts and Staff Acknowledgments:
Tables:
Table 1: Discretionary Grant Programs Available and Used to Support
UPAs:
Table 2: Urban Partner Congestion-Reduction Projects Using the 4Ts:
Table 3: The Department's Communication of Information on Funding
Availability to Applicants:
Table 4: Nine Grant Programs that Permit the Department to Use
Congestion Pricing/Tolling as a Selection Factor:
Table 5: Four Phases of the UPA Evaluation:
Table 6: Evaluation Questions and Analyses for the UPA Evaluation:
Table 7: Corridors Projects That Received Funding:
Figures:
Figure 1: The Department's View of How Tolling (Congestion Pricing),
Transit, Technology, and Telecommuting Reduce Congestion:
Figure 2: Degree to Which the Department Communicated Selection
Criteria to Applicants:
Figure 3: UPA Funding Timeline:
Figure 4: Locations of the Six Corridors of the Future:
Figure 5: Comparison of Funding Provided through 11 Grant Programs to
Top 10 States and to UPA Initiative and Corridors States:
Figure 6: Comparison of Funding Provided through the Bus and Bus
Facilities and New Starts/Small Starts Programs to Top 10 States and to
UPA Initiative and Corridors States:
Figure 7: Comparison of Funding Provided through 9 Remaining Grant
Programs to Top 10 States and to UPA Initiative and Corridors States:
Abbreviations:
4Ts: tolling, transit, technology, and telecommuting:
Corridors: Corridors of the Future:
FHWA: Federal Highway Administration:
HHS: Department of Health and Human Services:
HOT: high-occupancy toll:
HOV: high-occupancy vehicle:
ITS-OTMC: Intelligent Transportation Systems-Operational Testing to
Mitigate Congestion:
LEAA: Law Enforcement Assistance Administration:
PUP: preliminary urban partner:
SAFETEA-LU: The Safe, Accountable, Flexible, Efficient Transportation
Equity Act--A Legacy for Users:
TCSP: Transportation, Community, and System Preservation program:
UPA: urban partnership agreement:
[End of section]
United States Government Accountability Office:
Washington, DC 20548:
March 25, 2009:
Congressional Committees:
Mobility on our nation's roads is essential for a strong economy. These
roads provide businesses with access to materials, markets, and people
and provide people with access to goods, services, jobs, and
recreation. According to the Department of Transportation (the
department), congestion is one of the single largest threats to our
economic prosperity and way of life. In addition, the department states
that congestion and the growing unreliability of the highway system
impose severe costs on the quality of life of millions of Americans.
[Footnote 1] We have reported that the nation's transportation
infrastructure is under great strain and that congestion is significant
and expected to worsen. Furthermore, federal funds are often tied to a
single transportation mode, which may limit the use of these funds to
finance the greatest improvements in mobility.[Footnote 2] The
department also has recognized that these "modal funding silos" present
challenges in combating congestion,[Footnote 3] and in May 2006 it
issued a strategy to reduce congestion that, among other things, called
for:
* entering into urban partnership agreements (UPA) under which the
department would give priority consideration for funding from existing
programs to cities, designated as urban partners, that had developed
and were standing ready to quickly implement a comprehensive,
integrated, and innovative performance-oriented approach designed to
reduce congestion through the use of the "4Ts"--tolling (more
specifically, congestion pricing[Footnote 4]), transit, technology, and
telecommuting--rather than relying on unintegrated efforts to relieve
congestion;
* establishing a Corridors of the Future (Corridors) program as a model
for adopting a multistate approach to planning, developing,
constructing, operating, and maintaining nationally and regionally
significant transportation corridors that would be designated to reduce
congestion and increase freight system reliability; and:
* reducing barriers to private-sector investment in the construction,
ownership, and operation of transportation infrastructure.[Footnote 5]
In our prior work, we have supported integrated, performance-based
approaches to reducing congestion.[Footnote 6] In addition, we have
reported that public-private partnerships show promise--but also risk-
-as a strategy to provide new infrastructure and funding for
transportation needs.[Footnote 7]
In February 2007, Congress enacted a continuing resolution for fiscal
year 2007. The continuing resolution funded the department at 2006
levels but did not include spending directives (earmarks) for the
department's grant programs.[Footnote 8] According to the department,
the continuing resolution gave it the opportunity to make funding
decisions based on programmatic criteria and merit, rather than
devoting funds to projects specifically directed by Congress that, in
the department's view, may have had fewer transportation benefits or
that otherwise would have been ineligible for funding. Given this
flexibility, the department decided to further its 2006 congestion-
reduction initiative by making available about $1 billion of its 2007
appropriation for its UPA initiative, through grants made under 13
existing highway, transit, and technology grant programs. This was a
major undertaking over a short time to develop an integrated approach
from separately existing programs. The department set aside the bulk of
these funds to support its UPA initiative and, in August 2007,
conditionally awarded about $848 million from 10 of the 13 programs to
five cities: Miami, Florida; Minneapolis, Minnesota; New York City, New
York; San Francisco, California; and Seattle, Washington.
As part of an integrated approach to reducing congestion, many UPA
applicant cities[Footnote 9] proposed to implement a tolling
(congestion-pricing) project. To address the other three "Ts," urban
partners coupled their congestion pricing projects with transit,
technology, and telecommuting projects. Transit projects included
expanded bus service (and sometimes ferry service), including providing
additional buses and bus stops, express bus routes, and park-and-ride
facilities. Technology uses included such things as providing real-time
traveler information on tolls being charged and opportunities for
rerouting traffic to alternative travel routes. Telecommuting involved
increasing the number of telecommuters. Applying for the UPA initiative
required no small effort on the part of applicants because many public
stakeholders were involved and some cities faced political opposition
to congestion-pricing projects. For example, New York City was unable
to obtain authority from the state legislature to implement a
congestion-pricing approach. In accordance with the terms of the
department's agreement with New York City, the department therefore
canceled the city's UPA and in 2008 awarded the funds to Chicago,
Illinois; Los Angeles, California; and Seattle, Washington.[Footnote
10] In addition to awarding funds to cities for integrated approaches
to reducing congestion that could be implemented quickly, the
department saw another major benefit of UPAs as providing an incentive
for state and local transportation stakeholders to work together toward
transportation solutions. Beyond breaking down stovepipes in devising
approaches to reduce congestion, UPAs, according to department
officials, helped break down stovepipes within the department as
different transportation administrations increased collaboration in
addressing congestion-reduction strategies, where before they may have
acted separately.[Footnote 11]
In response to the department's dedication of about $1 billion to its
congestion-reduction initiatives and its focus on funding a small
number of cities through the UPA initiative, Congress, in the
conference report for the department's fiscal year 2008 appropriation
and in a separate letter from the Senate and House leadership
responsible for transportation matters, requested that we review
certain aspects of the UPA initiative. To do this, we examined (1) the
department's communication and application of the selection criteria
and funding devoted to the UPA initiative, (2) the department's
authority to allocate substantial grant funds to support the UPA
initiative and to consider congestion pricing as a priority factor in
selecting urban partner awardees for underlying grant programs, and (3)
steps the department is taking to ensure that UPA award conditions are
being met and that results will be evaluated. These activities are the
main focus of this report. In addition, in response to your interests,
we examined how the department selected awardees for its Corridors of
the Future program, the department's efforts to promote public-private
partnerships, and the extent to which previous recipients of grants
from programs that funded the UPA initiative and Corridors were awarded
funds from those programs in fiscal year 2007. (See apps. I to III.) We
did not assess the merits of the UPA initiative or Corridors program
design.
To carry out our work, we reviewed the department's communication of
the criteria for selecting UPA awardees and the funding amounts to be
devoted to the initiative through notices in the Federal Register and
UPA initiative outreach materials, such as presentation slides and
handouts. We also discussed these activities with senior department
leaders, department staff who reviewed UPA applications, and 14 of the
26 UPA applicants.[Footnote 12] We also reviewed all of the 26 UPA
applications. In determining good grants practices, we reviewed the
department's, as well as other government agencies', grant policies.
Furthermore, we researched and analyzed the department's legal
authority to allocate substantial grant funds to support the UPA
initiative and to consider congestion pricing as a selection factor for
allocating individual grant funds to support UPAs, by reviewing
relevant statutes, case law, and department records, and by obtaining
the department's legal views. Finally, we reviewed documents and
interviewed department officials on their actions to monitor UPA award
conditions and plans to evaluate each urban partner's projects to
reduce congestion. Specifically, we reviewed urban partner term sheets
and grant or cooperative agreements that list the conditions to receive
federal funds. We conducted this performance audit from February 2008
through March 2009 in accordance with generally accepted government
auditing standards. Those standards require that we plan and perform
the audit to obtain sufficient, appropriate evidence to provide a
reasonable basis for our findings and conclusions based on our audit
objectives. We believe that the evidence obtained provides a reasonable
basis for our findings and conclusions based on our audit objectives.
(See app. IV for additional discussion of our scope and methodology.)
Results in Brief:
Overall, although we did not assess the merits of the UPA initiative's
design, we have reported on our support for the concept of providing
performance-oriented, integrated approaches, such as the UPA
initiative, to help reduce congestion.
The department clearly communicated all but one of the criteria that it
used to select urban partners, but it did not communicate the relative
priority of the criteria or the full amount of available funding to
applicants, and its methods of assisting applicants raise concerns.
More specifically, the department clearly communicated to potential
applicants 10 of the 11 criteria it used to select cities as urban
partners, such as the need for cost-effective projects. However, it did
not communicate to applicants the relative priority, or weights, it
would give the criteria in selecting projects. Clearly communicating
selection criteria and their weights is important to ensure that the
selection process is as fair as possible, and governmentwide guidance
calls for disclosing all selection criteria and their weights to
applicants. For the remaining criterion, department officials told us
that they looked positively on applications that were politically bold-
-that is, proposed a congestion-pricing project that represented a
political challenge to acceptance in the applicant's region--but did
not inform applicants that political boldness was a selection
criterion. In addition, the department did not communicate the full
amount of available funding to applicants, although it did keep them
abreast of most of the changes to available funding. As the fiscal year
2007 budget evolved, the amount available to the UPA initiative
increased from $100 million to about $1 billion. The department
communicated through Federal Register notices that $852 million was
available. While communicating the complete amount ($1.02 billion)
would have been desirable to gain the most responsive applications to
the initiative's goal of congestion-reduction, the $852 million amount,
in our opinion, provided potential applicants with a rough
understanding of the program's size. We also found that the department
proactively gave assistance to two semifinalists (called preliminary
urban partners or PUPs) that it did not provide to the other seven
semifinalists. For example, according to Minneapolis officials, after
the city was selected as a PUP, the department told Minneapolis
officials to revise its application and include fewer projects than it
originally applied for. We believe that while this attention could
cause concern, it is unclear--in the absence of government-wide or
departmental guidance--how to assess the appropriateness of the
department's actions.
The department had authority under the 2007 Revised Continuing
Appropriations Resolution to allocate its appropriations to various
existing grant programs, as long as the funds were spent for the
purposes specified in the appropriations legislation and the department
complied with the restrictions and requirements of the underlying grant
statutes.[Footnote 13] The department also had authority to consider
congestion pricing as a priority factor in selecting urban partners to
receive grants under these programs. The department likely failed to
comply with all of the statutory priority consideration specified in
the statute for one of the grant programs--Transportation, Community
and System Preservation program--through which the department awarded a
total of $50.4 million to urban partners. Based on available
information, however, it is not clear that this failure affected the
ultimate grant award decisions.
The department is monitoring UPA award conditions to ensure they are
being met and has developed a framework to ensure that the initiative's
results will be evaluated. The department created a UPA management team
to track urban partners' progress in completing the requirements
established as conditions of the awards, such as obtaining authority to
use congestion pricing where needed. The UPA management team uses
memorandums of understanding, funding agreements, an implementation
matrix, and project management documentation, among other things, to
monitor the progress being made on award conditions. The department has
acted to ensure that urban partners complete award conditions. In April
2008, the department canceled New York City's urban partner designation
after the city was unable to obtain the authority for congestion
pricing, which was a condition of its UPA award. In addition, the
department will evaluate urban partners' strategies for reducing
congestion and has created a UPA evaluation subteam to lead this
effort. In April 2008, the evaluation team hired Battelle Memorial
Institute (Battelle) to evaluate the urban partner projects. Battelle
will also coordinate with officials from Miami, which is funding and
performing its own UPA evaluation. The department's evaluation team
will manage Battelle's efforts, which Battelle plans to complete by
late 2011. Although progress has been made in monitoring and evaluating
urban partner activities, we did not attempt to assess the overall
reasonableness of these efforts because they are in the early stages.
This report contains recommendations to the Secretary of Transportation
aimed at better ensuring that applicants for future congestion-
reduction initiatives are provided with all selection criteria and
their weights ensuring that the department applies statutory priority
selection factors correctly.
In commenting on a draft of this report, the department generally
agreed with most of our findings. The department indicated that it was
considering the recommendations and noted that the recommendation
concerning the Transportation, Community, and System Preservation
program will require its own legal analysis.
Background:
In May 2006, the department announced its National Strategy to Reduce
Congestion on America's Transportation Network (the "congestion
initiative"), a comprehensive national initiative to reduce congestion
on the nation's roads, rails, runways, and waterways. A major component
of this initiative is the UPA initiative, under which the department
gives selected cities special consideration for funding from existing
programs. To qualify for selection, a city had to develop and be ready
to quickly implement a comprehensive, integrated, and innovative
approach to reducing congestion through the use of the 4Ts.
On December 8, 2006, the department issued a Federal Register notice
soliciting proposals by cities to enter into UPAs with the department.
[Footnote 14] According to the notice, the department planned to fund
the agreements through several existing grant programs and lending and
credit support programs. This cross-cutting approach was designed to
enable the department to fund the greatest improvements in mobility in
a coordinated manner across its modal operating administrations. The
notice further indicated that the department would support its urban
partners with regulatory flexibilities and dedicated expertise and
personnel. Applicants wishing to become urban partners had to submit
their applications by April 30, 2007. The notice stated that the
department would consider applications filed after this date to the
extent practicable. In addition, applicants had to apply to any
underlying grant program from which they sought funding. They could do
so by submitting a single application that covered each of the grant
programs as long as the application was responsive to the requirements
of each program. To achieve this, the department published several
Federal Register notices between December 2006 and March 2007,
requesting that UPA applicants apply to the underlying programs.
The Federal Register notice also set forth requirements for the UPA
application. Under the UPA initiative, the department and the urban
partner would agree to pursue the 4Ts to reduce traffic congestion. The
department sought projects with congestion pricing to help shift some
rush-hour traffic to off-peak times, coupled with new or expanded
transit services. In this way, buses could move more freely through
previously congested roadways and could provide more reliable service.
[Footnote 15] To further reduce congestion, the urban partner could use
cutting-edge technologies--such as providing travelers with real-time
transportation information--to improve transportation performance and
secure agreements from area employers to expand telecommuting programs.
(See figure 1.) Finally, the department's solicitation stated that
neither the procedures nor the criteria identified in the notice would
be binding on the department.
Figure 1: The Department's View of How Tolling (Congestion Pricing),
Transit, Technology, and Telecommuting Reduce Congestion:
[Refer to PDF for image: illustration]
Reduced traffic congestion results from:
Tolling (congestion pricing):
* Charges drivers on highways or drivers using parking spaces a fee
that varies by traffic volumes or time of day according to a published
schedule, which shifts some discretionary rush hour traffic to off-peak
times and helps allocate traffic levels throughout the day;
* Improves reliability of transit services by creating freer flowing
traffic conditions, encourages increased transit ridership, and expands
the source of revenue that may be used for transit.
Transit:
* Enhanced transit services improve highway throughput during peak
travel times;
* Accommodates commuters who shift transportation modes after the
imposition of congestion pricing.
Technology:
* Traffic signaling coordination along a corridor reduces stops and
allows vehicles to move at greater speeds;
* Lane management devices and signal priority systems for buses improve
transit quality;
* Traveler information systems, such as Web or wireless access to route-
specific travel time and toll information, help commuters plan to
travel at off-peak times or take alternate routes;
* Transponders, cameras, or global positioning systems allow congestion
pricing fees to be collected at highway speeds.
Telecommuting:
* Employees working from home reduces the number of cars on the road;
* Flexible scheduling allows workers to travel at off-peak times;
* Telecommuting centers allow commuters to shift travel to less
congested roads.
Source: GAO analysis of Department of Transportation information.
[End of figure]
Aside from publishing the UPA initiative notice in the Federal
Register, the department took a number of steps intended to (1)
generate interest in the initiative, (2) encourage cities to develop
fresh ideas, and (3) provide information to potential applicants.
First, before publishing the December 2006 Federal Register notice,
department officials met separately with officials from three urban
areas--Seattle; northern Virginia; and Portland, Oregon--and presented
information on congestion pricing and UPAs. Then, after publishing the
notice, at the request of New York City, department officials met with
the New York state legislature; conducted national workshops in
Atlanta, Georgia; Denver, Colorado; and Washington, D.C. that were open
to any interested UPA applicant;[Footnote 16] made presentations at
transportation conferences; and held a Webinar for city officials who
could not attend the national workshops.[Footnote 17] In the workshops
and the Webinar, department officials discussed congestion pricing and
supporting strategies, political and public outreach techniques that
might be used to gain support for congestion-pricing initiatives, and
potential funding opportunities under UPA. According to the department,
it conducted a number of other outreach activities including (1)
establishing a Web page with information for such applicants,[Footnote
18] (2) giving speeches on the UPA initiative, and (3) sending
information on congestion pricing to e-mail listservs. In its Federal
Register notice, the department stated that it reserved the right to
solicit, and was actively soliciting, by means other than the notice
certain cities the department had determined to be candidates for UPA
award consideration.
The department received 26 UPA applications and created a multistep
review process to select PUPs (announced in June 2007) and then urban
partners (announced in August 2007). First, a review team, composed of
staff from several modal administrations,[Footnote 19] used several
technical criteria--such as innovation, the comprehensiveness of the
4Ts, cost-effective use of federal dollars, and the feasibility and
likelihood of implementation--to perform a technical review of the UPA
applications and rank them for the department's senior leaders. Second,
the senior leaders reviewed the review team's rankings in light of
broader department goals and recommended nine PUPs to the Secretary,
which according to department officials, the Secretary approved.
[Footnote 20] The PUPs then each presented their proposals, first to
the Secretary and Deputy Secretary and afterward to officials from the
modal administrations involved in the UPA initiative. Following these
presentations, the department, in some cases, asked for additional
detail or clarification from the applicant. Third, using this
information, the review team created funding scenarios--for example,
one scenario provided funding for New York City and four other urban
partners while another scenario did not provide funding for New York
City, but did do so for seven other urban partners. Finally, using UPA
applications and funding scenarios, the Secretary selected five urban
partners--Miami, Minneapolis, New York City, San Francisco, and
Seattle. The Federal Register notice stated the department would select
up to 10 urban partners.
The urban partner designation did not include funds for the urban
partners, but did give them special consideration in obtaining
department resources such as funding from grant programs and
administrative flexibilities, including streamlined environmental
reviews. Between December 2006 and April 2007, the department issued
several Federal Register notices describing the amount of funding
available to urban partners. Initially, the Federal Register notice
stated that up to $100 million, over 3 years, was available from 1
grant program, but this amount was expanded to about $1 billion from 13
grant programs when the President signed the 2007 Revised Continuing
Appropriations Resolution. Unlike previous years, the department's
appropriation was not subject to congressional directives that funds be
dedicated for particular transportation projects. As a result, urban
partners applied for and were eventually awarded funds from 10 grant
programs for 94 projects totaling $848.1 million. (See table 1.) This
report focuses on the 5 urban partners, 94 projects, and $848.1 million
in awards announced in August 2007. As the department negotiated with
the prospective urban partners, the numbers of urban partners,
projects, and awards were reduced somewhat.
Table 1: Discretionary Grant Programs Available and Used to Support
UPAs:
Program: Bus and Bus Facilities;
Description: Provides for new and replacement buses and related
equipment and facilities;
Amount available: $433 million;
Amount awarded: $418 million.
Program: New Starts/Small Starts;
Description: Supports locally planned, implemented, and operated
transit "guideway" capital investments (e.g., trolleys);
Amount available: $145 million;
Amount awarded: $113 million.
Program: Intelligent Transportation Systems-Operational Testing to
Mitigate Congestion;
Description: Supports the implementation of intelligent transportation
system policies and programs aimed at increasing the level of
integrated deployment of these systems[A];
Amount available: $100 million;
Amount awarded: $92 million.
Program: Interstate Maintenance Discretionary;
Description: Provides funding for resurfacing, restoration,
rehabilitation, and reconstruction work on most existing Interstate
system routes;
Amount available: $92 million;
Amount awarded: $50 million.
Program: Public Lands Highway Discretionary;
Description: Improves access to and within federal lands;
Amount available: $84 million;
Amount awarded: $47 million.
Program: Transportation, Community, and System Preservation;
Description: Provides funding for a comprehensive initiative including
implementation grants and research to address the relationships between
transportation, community, and system preservation and to identify
private-sector-based initiatives;
Amount available: $55 million;
Amount awarded: $50 million.
Program: Ferry Boat Discretionary;
Description: Provides for constructing ferry boats and terminal
facilities;
Amount available: $40 million;
Amount awarded: $40 million.
Program: Value Pricing Pilot;
Description: Encourages the implementation and evaluation of projects
to manage congestion on highways through tolling and other pricing
mechanisms;
Amount available: $30 million;
Amount awarded: $30 million.
Program: Alternatives Analysis[B];
Description: Assists in financing the evaluation of modal and
multimodal alternatives and general alignment options for identified
transportation needs in a particular, broadly defined travel corridor;
Amount available: $12 million;
Amount awarded: $2 million.
Program: Highways for Life;
Description: Accelerates the adoption of innovations and new
technologies, thereby improving safety and highway quality while
reducing congestion caused by construction;
Amount available: $9 million;
Amount awarded: 0.
Program: Delta Region Development;
Description: Supports and encourages multistate transportation planning
and corridor development in the eight states forming the Delta
region[C];
Amount available: $9 million;
Amount awarded: 0.
Program: Truck Parking Pilot;
Description: Addresses the shortage of long-term parking for commercial
motor vehicles on the national highway system;
Amount available: $6 million;
Amount awarded: $5 million.
Program: Innovative Bridge Research and Deployment;
Description: Accelerates the adoption of innovations and new
technologies, thereby improving safety and highway quality while
reducing congestion caused by construction;
Amount available: $5 million;
Amount awarded: 0.
Total:
Amount available: $1,020 million;
Amount awarded: $$848 million[D].
Source: GAO presentation of Department of Transportation information.
[A] Intelligent transportation systems involve the use of a variety of
hardware and software that enables applications of advanced electronics
and information management to monitor, regulate, and facilitate traffic
flow; support transit, commercial vehicle, and freight operations; and
improve highway safety.
[B] Although the Alternative Analysis program was part of the UPA
initiative, department officials told us they did not consider the 4Ts
in awarding these funds.
[C] Alabama, Arkansas, Illinois, Kentucky, Louisiana, Mississippi,
Missouri, and Tennessee.
[D] Amounts do not add to $848 million because of rounding.
[End of table]
The department awarded New York City $354.5 million (42 percent) of the
$848.1 million. San Francisco was awarded $158.7 million (19 percent),
Minneapolis $133.3 million (16 percent), Seattle $138.7 million (16
percent), and Miami $62.9 million (7 percent). In addition, although
San Diego was not selected as an urban partner, the department awarded
it $15 million under the Bus and Bus-Related Facilities Capital
Investment Grants (Bus and Bus Facilities) program and $3 million under
the Intelligent Transportation Systems-Operational Testing to Mitigate
Congestion (ITS-OTMC) program for a project element of its UPA
application. Departmental senior leaders and officials believed that
San Diego's project to demonstrate the safety and efficiency of cutting-
edge separation and braking technologies on narrow lanes was
meritorious.[Footnote 21]
Each urban partner proposed to implement a tolling project with
congestion pricing that would be supported by projects primarily from
at least two of the other three Ts--transit and technology. (See table
2.) According to department officials, telecommuting projects received
less emphasis from the urban partners and the department because it was
generally beyond the control of the city to influence many employers
and because they received telecommuting proposals in few applications.
Table 2: Urban Partner Congestion-Reduction Projects Using the 4Ts:
Urban partner: Miami;
Project element: Tolling: Transition from one high-occupancy vehicle
(HOV) lane in each direction along I-95 into two variably priced high-
occupancy toll (HOT) lanes in each direction.[A]
Project element: Transit: Expand transit capacity and implement new bus
rapid transit service within the HOT lanes. Improve a park-and-ride
transit facility.
Project element: Technology: [Empty];
Project element: Telecommuting: [Empty].
Urban partner: Minneapolis;
Project element: Tolling: Convert the existing HOV lanes along I-35
West into dynamically priced HOT lanes. Operate dynamically priced
shoulder lanes along I-35 West.
Project element: Transit: Increase park-and-ride and transit capacity
along the corridor. Construct double-lane contraflow bus lanes, bus
rapid transit stations, and other bus amenities.
Project element: Technology: Implement bus technologies (e.g., traffic
signal priority).
Project element: Telecommuting: Install a pilot program with the goal
of increasing the number of teleworkers in the I-35 West corridor by
500 individuals.
Urban partner: New York City;
Project element: Tolling: Institute a cordon pricing system in Manhattan
south of 86th Street.
Project element: Transit: Construct a series of bus rapid transit
corridors. Construct new transit facilities. Construct an East River
bus lane. Purchase additional buses. Improve regional ferry boat
service. Collect and analyze data on transit ridership patterns, travel
times, and mode preference.
Project element: Technology: Implement transit technologies, including
transit signal priority.
Project element: Telecommuting: [Empty].
Urban partner: San Francisco;
Project element: Tolling: Implement congestion pricing on either Doyle
Drive or the Golden Gate Bridge. Variably price parking in downtown San
Francisco.
Project element: Transit: Improve regional ferry boat service.
Project element: Technology: Develop a simplified forecasting approach
for a bus rapid transit corridor. Provide travelers with integrated
mobility accounts. Upgrade hardware/software in key corridors to improve
traffic movement. Upgrade the regional 511 system to provide real-time
tolling, parking, and transit information.[B]
Project element: Telecommuting: Expand the technical and promotional
aspects of telecommuting programs.
Urban partner: Seattle;
Project element: Tolling: Variably price portions of all through-lanes
of SR-520.
Project element: Transit: Increase transit capacity along SR-520 by
enhancing express bus service and constructing transit improvements.
Improve regional ferry boat service.
Project element: Technology: Use advanced technologies to actively
manage congestion along SR-520 and I-90. Provide travelers with realtime
transportation information.
Project element: Telecommuting: Work to increase the use of
telecommuting within the region.
Source: GAO presentation of Department of Transportation information.
[A] A high-occupancy-vehicle lane is designated for carpool/vanpool
vehicles. A high-occupancy toll lane allows carpool/vanpool vehicles to
drive toll-free in the lane, but also allows motorists that do not meet
established vehicle occupancy requirements to drive in the lane if they
pay a toll, allowing them to travel faster and more reliably than
traffic in adjacent nonpriced lanes.
[B] 511 is a nationwide three-digit telephone number to call for
traveler information.
[End of table]
Each UPA was subject to several terms and conditions. One significant
condition was that no urban partner could expend federal funds until it
had obtained the legal authority necessary to implement congestion
pricing for the applicable highway or parking area. To date, three
urban partners have the necessary authority for congestion pricing--
Miami, Minneapolis, and San Francisco--and Seattle needs to obtain it
by September 2009.[Footnote 22] However, New York City failed to meet
its April 2008 deadline for obtaining congestion pricing authority from
the state legislature. As a result, in accordance with the terms of the
department's UPA with New York City, the department cancelled New York
City's agreement[Footnote 23] and awarded about $364 million to Chicago
and Los Angeles through the department's Congestion Reduction
Demonstration Program.[Footnote 24]
As its name indicates, the Congestion Reduction Demonstration Program,
established in 2007, is a successor to the UPA initiative. This
program's goals and selection criteria are similar to the UPA
initiative's. For example, the Federal Register notice solicited
applications that would support congestion-pricing, transit, and
technology strategies to reduce congestion.[Footnote 25] Like the UPA
initiative, the Congestion Reduction Demonstration Program allows the
department to partner with applicants to support congestion reduction
using the department's discretionary funds. In addition, in July 2008,
the Secretary announced a new administration plan to create a more
sustainable way to pay for and build roads and transit systems.
[Footnote 26] This plan includes a proposal for creating a Metropolitan
Mobility Program. Among other things, this proposal envisions financial
support for innovative approaches to reduce traffic congestion.
The Department Communicated Most Selection Information to Applicants,
but Gave Two Applicants Assistance over Others:
The department clearly communicated 10 of the 11 criteria it used to
select urban partners, but it could have better communicated to
applicants the relative weights it would assign to the selection
criteria and the amount of funding available under the UPA initiative.
We also found that the department provided additional attention to two
applicants after they were selected as PUPs, but in the absence of
government-wide guidance it is unclear on how to assess the
appropriateness of this attention.
Nearly All Selection Criteria Were Communicated Clearly to Applicants
but the Department Could Have Better Communicated the Weights Assigned
to the Criteria:
According to grants policies and guidance, funding announcements that
clearly state the criteria that will be used to evaluate applications
promote competition and fairness in the selection of grantees. For
example, an Office of Management and Budget policy directive states
that an agency's funding announcements must clearly describe all
criteria and if they vary in importance, the relative priority, or
weights, assigned to the criteria.[Footnote 27] Similarly, the Federal
Highway Administration's (FHWA) assistance agreement procedures manual
states that evaluation criteria must be prepared before a funding
announcement is published and should be available to both applicants
and reviewers.[Footnote 28] These procedures allow applicants to make
informed decisions when preparing their applications and help ensure
the selection process is as fair and equitable as possible. Like the
Office of Management and Budget's guidance, the FHWA manual identifies
good grants making practice but it does not strictly apply to the UPA
initiative, since four of the grant programs under the initiative were
not FHWA programs. The department does not have agency-wide guidance
that mirrors the Office of Management and Budget guidance.
The UPA initiative was not funded like a traditional grant program,
since there was no UPA-specific funding. Instead, the department gave
urban partners special consideration when allocating funds from as many
as 13 individual grant programs. However, we believe grant-making
practices such as those prescribed in the Office of Management and
Budget's guidance are relevant to the initiative because they can
increase the likelihood that the department will receive applications
that best further agency goals.
The department used 11 criteria to select urban partners. (See figure
2.) We found that the department clearly communicated 10 of these to
potential applicants in the December 2006 Federal Register notice. For
example, this notice made it clear to applicants that the department
wanted applicants to incorporate the 4Ts and explained how the
different parts of the 4Ts strategy would interact to reduce congestion
(synergy of 4Ts). This notice also stated the department sought
proposals that would affect the most surface transportation travelers,
include congestion pricing, be cost effective, and demonstrate
innovative technology applications. The notice also made it clear the
department sought proposals that were likely to be implemented, and
requested that applicants submit information on political support for
their proposal.
Figure 2: Degree to Which the Department Communicated Selection
Criteria to Applicants:
[Refer to PDF for image: illustration]
Selection criteria: Congestion pricing measures;
How communicated: Federal Register notice;
Degree communicated: Communicated.
Selection criteria: Potential congestion reduction;
How communicated: Federal Register notice;
Degree communicated: Communicated.
Selection criteria: Cost-effectiveness;
How communicated: Federal Register notice;
Degree communicated: Communicated.
Selection criteria: Funding support;
How communicated: Federal Register notice;
Degree communicated: Communicated.
Selection criteria: Implementation time frame;
How communicated: Federal Register notice;
Degree communicated: Communicated.
Selection criteria: Political and technical feasibility;
How communicated: Federal Register notice;
Degree communicated: Communicated.
Selection criteria: Synergy of 4Ts;
How communicated: Federal Register notice;
Degree communicated: Communicated.
Selection criteria: Travelers affected daily;
How communicated: Federal Register notice;
Degree communicated: Communicated.
Selection criteria: Innovation;
How communicated: Federal Register notice;
Degree communicated: Communicated.
Selection criteria: National demonstration value;
How communicated: Federal Register notice;
Degree communicated: Communicated.
Selection criteria: Political boldness;
How communicated: Not communicated to applicants;
Degree communicated: Not communicated.
Source: GAO analysis of the Department of Transportation‘s criteria and
actions.
[End of figure]
The remaining criterion--political boldness--however, was not
communicated at all to applicants. As a result, the applicants we spoke
with had varying levels of awareness and understanding of this
criterion. Senior department officials considered the political
boldness of a city's projects when selecting urban partners. The
department defined this criterion as the level of boldness of the
congestion-pricing component relative to the level of political
acceptance of congestion pricing in the applicant's particular region.
Senior department officials told us they viewed projects that were
politically bold positively, and took into consideration that although
a particular congestion-reduction strategy might not be new nationally,
it could be politically bold in the applicant's region. This criterion
was not stated in the Federal Register, on the department's Web site,
or in presentations. The department subsequently told us that political
boldness was the same as political and technical feasibility. However,
in our view, proposals can be politically feasible without being bold
and the department was looking for bold proposals. Nine of the 14
applicants we spoke with said they were not aware of this selection
criterion,[Footnote 29] while another 5 applicants told us they thought
the department implied it was seeking politically bold proposals.
[Footnote 30]
The department's March 2007 Federal Register notice indicated the
criteria could change. It stated that neither the procedures nor the
criteria set out in the notice would be binding on the department. Our
search for language of this sort in Federal Register notices found that
it is unique.[Footnote 31] The department indicated it might have
needed to change both the criteria and the procedures to gain more
participation in the initiative.
The department's Federal Register notice announcing the selection
criteria for the UPA initiative also fell short of the Office of
Management and Budget's policy guidance in that it did not communicate
the relative weights of the selection criteria, as the guidance
directs. Department officials and six of eight reviewers told us they
viewed congestion pricing measures as the most important criterion in
selecting urban partners. The department identified congestion pricing
as the most important of the 4Ts in a document posted on its Web site 4
weeks before applications were due--and about 16 weeks after the
original Federal Register notice appeared.[Footnote 32] Although some
applicants we spoke with were aware of the department's emphasis on
congestion pricing in general, none knew the relative weights of the
selection criteria.[Footnote 33] Nine of the 14 applicants we spoke
with about the impact of the weighting information on their
applications said that having weighting information would have changed
their applications,[Footnote 34] while the remaining 5 said it would
not.[Footnote 35] For example, an official from San Diego noted that
knowing the weights of the selection criteria would have helped him to
decide which projects to include and exclude, and would have resulted
in a more focused application.
The department's incomplete communication to applicants of UPA
selection criteria and weights may have had little, if any, effect on
the final selection, since four of the five urban partners were rated
high for technical merit and the fifth one, while rated lower, was seen
as innovative because it would be the first in the country to convert
high-occupancy vehicle (HOV) lanes to high-occupancy toll (HOT) lanes
while simultaneously increasing HOV eligibility from two to three
occupants.
The Department Communicated Much of the Funding Availability as It
Became Known:
Grant announcements should fully describe the funding opportunity to
give applicants a sense of the scope of the funding, and to assist them
in prioritizing and developing their proposed projects. To this end, an
Office of Management and Budget policy directive requires an agency to
publish the full programmatic description of the funding opportunity,
to communicate to applicants the areas in which funding may be
provided, and to describe the agency's funding priorities. FHWA's
procedures manual reflects the Office of Management and Budget's
directive to include a description of the funding opportunity in the
grant announcement. Communicating the funding opportunity was important
for the UPA initiative, since the funding motivated cities to do the
comprehensive planning and serious consideration of congestion pricing
the department wanted cities to reflect in their applications.
As stated previously, an awardee's selection as an urban partner meant
the department would give the awardee priority consideration when
allocating funding from as many as 13 individual grant programs.
[Footnote 36] The original December 2006 UPA initiative announcement
indicated that up to $100 million was available to urban partners
through the ITS-OTMC program.[Footnote 37] (See figure 3.) After more
funds became available for the department's discretionary use, the
department decided sometime between February 15, 2007, and April 2007
to dedicate about $1 billion to the UPA initiative. As a result, the
department solicited applications for the 13 discretionary programs
through Federal Register notices over a period of 4 months (December
2006 through March 2007).
Figure 3: UPA Funding Timeline:
[Refer to PDF for image: illustration of timeline]
December 8, 2006: Federal Register notice solicits applications for UPA
and states that the department plans to use funding from the ITS-OTMC,
Value Pricing Pilot, Small Starts and other programs. Specifically, the
department may provide UPA up to $100 million of ITS-OTMC funds over 3
years. UPA applicants should apply separately to these programs.[FR]
December 18, 2006: Federal Register notice solicits applications for up
to $100 million over 3 years under ITS-OTMC program. In order to
support UPA, the department is seeking applications to the ITS-OTMC
program that have innovative uses of technology to address congestion.
[FR]
December 22, 2006: Federal Register notice solicits applications for up
to $12 million for each of fiscal years 2007 through 2009 under the
Value Pricing Pilot program. In order to support UPA, the department is
seeking applications that have congestion pricing strategies to reduce
congestion.[FR]
February 15, 2007: The President signs the department‘s fiscal year
2007 appropriation, which does not include directions on funding for
the department‘s grant programs.[O]
Sometime between February and April, 2007: The department posts a
funding document online indicating that about $1 billion will be
available from some programs over 3 years.[O]
March 22, 2007: Federal Register notice solicits applications for 8
highway grant programs, but does not list funding availability.
Applicants that also apply for UPA must submit separate applications to
each of the 8 highway programs from which they seek funding.[FR]
March 23, 2007: Federal Register notice solicits applications for $12
million for 1 year under the Alternatives Analysis program. Urban
partners will be given additional consideration to these funds.[FR]
March 23, 2007: The department issues two Federal Register notices
soliciting applications for $438 million for 1 year under the Bus and
Bus Facilities program. These funds will be available to Bus and Bus
Facilities and UPA projects. In addition, UPA applicants should apply
separately to the Bus and Bus Facilities program.[FR]
April 2, 2007: The department posts ’questions and answers“ online that
states about $1 billion in funds is available and instructs UPA
applicants to apply separately to 12 grant programs.[O]
April 10, 2007: Federal Register notice provides a summary of the 13
grant programs that are connected to UPA. For the New and Small Starts
programs, approximately $266 million for 1 year is available for fixed
guideway capital projects.[FR]
April 30, 2007: Applications for UPA, ITS-OTMC, Value Pricing Pilot,
and the 8 highway grant programs are due.[AD]
May 22, 2007: Applications for the Alternatives Analysis and Bus and
Bus Facilities programs are due.[A][AD]
June 7, 2007: The department announces 9 preliminary urban partners.[O]
August 14, 2007: The department announces 5 urban partners to
conditionally receive a total of $848 million.[O]
[FR] Federal Register notice.
[AD] Application deadline.
[O] Other event.
Source: GAO analysis of Department of Transportation information.
[A] The application deadline for New Starts and Small Starts program
projects varies depending on the stage of the project.
[End of figure]
Although funding for UPA was available under 13 grant programs, the
department published the amount of funding available in the Federal
Register for 5 of these programs and distributed funding information
for 12 at conferences and through its Web site. Between February 15,
2007, and April 30, 2007 (the date when UPA applications were due), the
department communicated the amount of funding available for UPAs to
applicants in two ways: First, the department solicited applications
for the 13 grant programs through Federal Register notices. (See table
3.) For 5 of these grant programs, the department published the amount
of funding available in the notices. The amount available for UPAs
through these 5 grant programs totaled $852 million and ultimately
accounted for 77 percent of the funds awarded to urban partners.
However, of this $852 million amount, $716 million (about 65 percent of
the approximate $1.1 billion that was ultimately made available) was
announced less than 6 weeks before the UPA application deadline. By the
time this additional funding was announced, applicants may have already
substantially completed their applications, and in some cases, obtained
the approval of their stakeholders. According to a department official,
it took the department several weeks to issue a Federal Register
notice. For the remaining 8 grant programs, the Federal Register
notices contained no information on the amount of funding available. A
department official told us he does not know why these Federal Register
notices did not include funding information.
The department disagreed with our assessment that the applicants could
have benefited if funding information had been communicated more than 6
weeks before applications were due. The department indicated that it
typically provides 2 months for the submission of applications and
cited several grant programs in which this was the case. For example,
the department said 2 months was adequate time to file Bus and Bus
Facilities program applications. However, because of its complexity,
the UPA application could be expected to take longer to complete than
applications for more traditional grant programs, such as the Bus and
Bus Facilities program.
Table 3: The Department's Communication of Information on Funding
Availability to Applicants:
Grant Program: Intelligent Transportation Systems Operational Testing
to Mitigate Congestion;
Federal Register notices: Date published in Federal Register: Dec. 18,
2006;
Federal Register notices: Funding availability listed in Federal
Register: $100 million;
Federal Register notices: Funding handout distributed via Web site and
conferences: $100 million;
Federal Register notices: Amount awarded to urban partners: $92
million.
Grant Program: Value Pricing Pilot;
Federal Register notices: Date published in Federal Register: Dec. 22,
2006;
Federal Register notices: Funding availability listed in Federal
Register: $36 million;
Federal Register notices: Funding handout distributed via Web site and
conferences: $30 million;
Federal Register notices: Amount awarded to urban partners: $30
million.
Grant Program: Bus and Bus Facilities;
Federal Register notices: Date published in Federal Register: Mar. 23,
2007;
Federal Register notices: Funding availability listed in Federal
Register: $438 million;
Federal Register notices: Funding handout distributed via Web site and
conferences: $438 million;
Federal Register notices: Amount awarded to urban partners: $418
million.
Grant Program: Alternatives Analysis;
Federal Register notices: Date published in Federal Register: Mar. 23,
2007;
Federal Register notices: Funding availability listed in Federal
Register: $12 million;
Federal Register notices: Funding handout distributed via Web site and
conferences: $12 million;
Federal Register notices: Amount awarded to urban partners: $2 million.
Grant Program: New Starts/Small Starts;
Federal Register notices: Date published in Federal Register: Apr. 10,
2007;
Federal Register notices: Funding availability listed in Federal
Register: $266 million;
Federal Register notices: Funding handout distributed via Web site and
conferences: $267 million;
Federal Register notices: Amount awarded to urban partners: $113
million.
Grant Program: Interstate Maintenance Discretionary;
Federal Register notices: Date published in Federal Register: Mar. 22,
2007;
Federal Register notices: Funding availability listed in Federal
Register: [A];
Federal Register notices: Funding handout distributed via Web site and
conferences: [A];
Federal Register notices: Amount awarded to urban partners: $50
million.
Grant Program: Transportation, Community, and System Preservation;
Federal Register notices: Date published in Federal Register: Mar. 22,
2007:
Federal Register notices: Funding availability listed in Federal
Register: [A];
Federal Register notices: Funding handout distributed via Web site and
conferences: $61 million;
Federal Register notices: Amount awarded to urban partners: $50
million.
Grant Program: Ferry Boat Discretionary;
Federal Register notices: Date published in Federal Register: Mar. 22,
2007;
Federal Register notices: Funding availability listed in Federal
Register: [A];
Federal Register notices: Funding handout distributed via Web site and
conferences: $60 million;
Federal Register notices: Amount awarded to urban partners: $40
million.
Grant Program: Highways for Life;
Federal Register notices: Date published in Federal Register: Mar. 22,
2007;
Federal Register notices: Funding availability listed in Federal
Register: [A];
Federal Register notices: Funding handout distributed via Web site and
conferences: $20 million;
Federal Register notices: Amount awarded to urban partners: 0.
Grant Program: Truck Parking Pilot;
Federal Register notices: Date published in Federal Register: Mar. 22,
2007;
Federal Register notices: Funding availability listed in Federal
Register: [A];
Federal Register notices: Funding handout distributed via Web site and
conferences: $6 million;
Federal Register notices: Amount awarded to urban partners: 0.
Grant Program: Innovative Bridge Research and Deployment;
Federal Register notices: Date published in Federal Register: Mar. 22,
2007;
Federal Register notices: Funding availability listed in Federal
Register: [A];
Federal Register notices: Funding handout distributed via Web site and
conferences: $5 million;
Federal Register notices: Amount awarded to urban partners: $5 million.
Grant Program: Delta Region Development;
Federal Register notices: Date published in Federal Register: Mar. 22,
2007;
Federal Register notices: Funding availability listed in Federal
Register: [A];
Federal Register notices: Funding handout distributed via Web site and
conferences: $10 million;
Federal Register notices: Amount awarded to urban partners: 0.
Grant Program: Public Lands Highway Discretionary;
Federal Register notices: Date published in Federal Register: Mar. 22,
2007;
Funding availability listed in Federal Register: [A];
Federal Register notices: Funding handout distributed via Web site and
conferences: $80 million;
Federal Register notices: Amount awarded to urban partners: $47
million.
Grant Program: Total;
Federal Register notices: Funding availability listed in Federal
Register: $852 million;
Federal Register notices: Funding handout distributed via Web site and
conferences: $1,089 million[B];
Federal Register notices: Amount awarded to urban partners: $848
million[C].
Source: GAO presentation of Department of Transportation information.
[A] Information not published in the Federal Register or included in
the funding handout.
[B] Although the department made available $1.020 billion as shown in
table 1, it communicated to applicants that $1.089 billion was
available.
[C] Dollar amounts do not total $848 million because of rounding.
[End of table]
Second, the department developed a funding handout that listed the
amounts available for UPAs through 12 of the 13 grant programs.
[Footnote 38] These amounts totaled almost $1.1 billion. The department
updated this document several times with new funding information and
posted the document on the department's Web site sometime between
February 15, 2007, and April 2007. In addition, department officials
handed out this document at conferences.
Applicants' understanding of the funding available under the UPA
initiative varied, and several applicants told us that if they had had
more complete funding information, they would have changed their
applications. Of the 14 applicants we spoke with about funding, 6 told
us they had the funding handout,[Footnote 39] which included
information on the availability of funding by program (see table 3),
while the other 8 said they did not have this handout when they were
developing their applications.[Footnote 40] Of the applicants that did
not have complete funding information, 6 told us they were aware of the
total funding available but not the amounts available for each program,
while 2 told us that they did not know the amount of funding available
under the initiative when they were applying to the program. Of the 2
UPA applicants that said they did not know the amount of funding
available to the initiative, 1 applicant said it thought the total
amount of funding available was the $100 million initially identified
under the ITS-OTMC program. Half of the 8 applicants we spoke with that
did not have the funding handout told us if they had had better
information on the funding available under the UPA initiative, they
would have changed their applications and been able to scope their
projects better.[Footnote 41] While communicating the complete amount
would have been desirable as a means of eliciting applications that
were optimally responsive to the initiative's goal of congestion
reduction, the $852 million amount, in our opinion, provided potential
applicants with a rough understanding of the program's size.
The Department Treated Two Applicants Differently from Others While
Evaluating Applications:
After the department selected nine cities as PUPs, it used various
methods to select and determine funding for the final 5 urban partners.
The department invited officials from the nine PUP cities to
Washington, D.C., to present their applications and asked them to
provide additional information, when needed, about their congestion-
reduction initiative. Department officials then explored ways to fund
UPAs by identifying the PUPs' core projects that were most in the
spirit of the initiative. Next, department staff developed funding
scenarios, including options with and without New York City, reflecting
the department's concerns that the New York state legislature might not
pass the congestion-pricing legislation necessary to allow the New York
City projects to move forward. At this time, department officials told
us that, in some cases, they were also contacting PUPs to have them
submit new grant applications because PUPs had submitted applications
for more funding than was available under some grant programs and
because PUPs could submit applications for the same uses under other,
undersubscribed programs.
However, in two cases, the department went beyond asking UPA applicants
to submit applications for the same projects under other funding
programs. In these instances, the department contacted the UPA
applicants to request substantive changes to the applications.[Footnote
42]
* Miami indicated in its application that it would run bus rapid
transit, but did not provide details on the project, or state its cost.
Miami officials told us they did not intend to purchase buses or
improve bus facilities through the UPA initiative. However, after
Miami's selection as a PUP, the department encouraged the city to apply
for funding from the Bus and Bus Facilities program and suggested
specific measures (such as bus branding, hybrid buses, bus facility
improvements, and transit signal priority technology) for city
officials to include in the proposal. As a result, Miami submitted a
Bus and Bus Facilities application 4 weeks after the application
deadline and was awarded $19.5 million in these funds.[Footnote 43]
According to department officials, this was reasonable, since Miami's
original UPA application had contained bus elements, even though Miami
had not originally requested funds to purchase buses or improve bus
facilities.
* According to officials from the Minnesota Department of
Transportation, after Minneapolis was selected as a PUP, the department
asked it to include fewer projects in its UPA application to make the
application more competitive for limited funding. According to
Minneapolis officials, this allowed Minneapolis to better describe some
projects and create more accurate cost estimates.
* The officials from the remaining seven PUPs told us the department
did not contact them to suggest specific ways of strengthening their
applications.
* Department officials told us that, after the nine PUPs presented
their proposals, all of the PUPs' congestion-reduction plans were
meritorious and all nine PUPs were worthy of being designated as urban
partners. Because time was of the essence in reaching a decision and
announcing the urban partner designations, department officials told us
that they provided special attention to the PUPs they felt were likely
to be selected as urban partners--rather than spending time with PUPs
that were unlikely to be selected--in order to craft the strongest
congestion-reduction proposals possible. They said that working with
only certain PUPs to develop stronger congestion-reduction efforts was
appropriate because prior interactions with other PUPs indicated that
those PUPs were less likely to make meaningful changes to their
proposals. Finally, they said that if at any time negotiations failed
with designated urban partners, the department would be able to offer
urban partner designation to another PUP.
* There is little if any government-wide or Department of
Transportation guidance that would shed light on when and if it is
appropriate to provide proactive assistance to grant applicants to help
them create stronger applications. Thus, while the assistance could
cause concerns, it is unclear how to assess the appropriateness of the
department's actions toward Miami and Minneapolis, where the grant-
making agency sees the applicants as such strong candidates that they
are likely to be selected.
The Department Had the Authority to Allocate Funds to the UPA
Initiative, and to Consider Congestion Pricing as a Priority Selection
Factor for Underlying Grant Programs:
The department had the legal authority to allocate appropriated funds
to the UPA initiative as long as the funds were spent for the purposes
authorized in the appropriations legislation, and the department
complied with the restrictions and requirements of the underlying grant
statutes. The department also had authority to consider congestion
pricing as a priority factor in making grant selections. Each of the
nine grant statutes either explicitly permitted the consideration of
congestion pricing or afforded the department discretion to consider
congestion pricing because it is rationally related to statutory
objectives.[Footnote 44] Because of an error in the department's
technical evaluation for the Ferry Boat program, the department's
initial documentation suggested that the department had improperly
favored congestion pricing over statutory priorities. The Secretary did
not rely on this documentation in awarding Ferry Boat grants, however,
and the corrected information confirmed that the urban partners in fact
met statutory priorities, and that the Secretary was within her
discretion to apply congestion pricing as a discriminating factor.
Finally, in one instance the Transportation, Community, and System
Preservation (TCSP) program the department likely did not comply with
all of the statutory requirements in evaluating the grant applications.
Based on available information, it is not clear that this failure
affected the ultimate grant award decisions. The statute required that
"priority consideration" be given to applicants meeting five specified
factors, and the department instead gave such consideration to
applicants (including urban partners) that met just one such factor.
Because "priority consideration" does not entitle an applicant to
selection as a grantee, only to a bona fide and careful review and
because the department terminated its evaluation after confirming
applicants met only one factor, it is not possible to determine whether
any applicant met all five factors and thus deserved the required bona
fide "hard look."
The Department Had the Authority to Allocate Appropriated Funds to the
UPA Initiative:
Agencies generally have considerable discretion in choosing how to
allocate lump-sum appropriations--appropriations that are available to
cover a number of programs, projects, or items--to specific programs
and activities. In the past, the department's discretion had been
circumscribed by congressional directives that earmarked most of its
appropriations for particular projects, but this changed for fiscal
year 2007. The department's fiscal year 2007 appropriation, enacted in
the 2007 continuing resolution, funded the department based on 2006
levels and authorities but removed earmarks contained in the 2006
committee reports (the continuing resolution stated that such earmarks
shall have no legal effect). In addition, the continuing resolution did
not include congressional directives that funds be dedicated or
earmarked for particular projects and stated that earmarks contained in
2006 committee reports shall have no legal effect. The department
interpreted this language as permitting it to allocate its
appropriations to various grant programs in order to fund its UPA
initiative. Specifically, the department drew from three lump-sum
appropriations for (1) payment of obligations incurred in carrying out
the provisions of bus-related statutes, (2) federal-aid highways and
highway safety construction programs, and (3) necessary expenses of the
Research and Innovative Technology Administration.
We concluded that the department's appropriations were available to
carry out the discretionary grant programs identified in each of these
lump-sum appropriations. The department had broad discretion in
choosing how to allocate funds among those programs. For example, the
"Federal-aid highways and highway safety construction programs" lump-
sum appropriation was available to fund several grant programs, and
absent any other statutory restriction, the department could choose how
much, if any, of that appropriation to allocate to each of the grant
programs. In carrying out each individual grant program, the
department, of course, was required to comply with the restrictions and
requirements of the underlying grant statutes and to award funding to
grantees in accordance with the statutory provisions. In the discussion
that follows, we address whether the department complied with these
underlying provisions.
The Department Had Authority to Consider Congestion Pricing as a
Priority Selection Factor for Each of the Grant Programs, but
Improperly Awarded "Priority Consideration" in the TCSP Program Based
on a One-Factor Approach:
As discussed earlier, in determining which cities would receive the
urban partner designation, the department gave special consideration to
those that had, or had committed to obtaining, authority to use
congestion pricing. The department then awarded grant funds under 10 of
its grant programs to the five urban partners. The impact of this
sequential process was to give congestion pricing priority as a
selection factor not only for the UPA initiative but for the individual
grant programs as well.
The specific terms of the authorizing statute for each grant determine
whether the department has the authority to give priority to congestion
pricing as a selection factor in making grant decisions. According to
department officials, they considered congestion pricing as a priority
or priority consideration selection factor for only 9 of the 10
programs (excluding the Alternative Analysis program). As a result our
analysis focused on the 9 remaining programs.[Footnote 45] We concluded
that the authorizing statutes for the 9 grant programs used to fund
urban partners either explicitly permit the consideration of congestion
pricing or afford the department discretion to consider congestion
pricing as a factor because it was rationally related to program
objectives. (See table 4.) In particular, 2 of the 9 grant-authorizing
statutes permit the Secretary to consider congestion pricing as a
selection factor by express mention: ITS-OTMC and Value Pricing Pilot
programs. The remaining 7 grant-authorizing statutes (Bus and Bus
Facilities; Ferry Boat Discretionary; Innovative Bridge; Interstate
Maintenance Discretionary; New Fixed Guideway Facilities (specifically
Very Small Starts); Public Lands Highway Discretionary; and TCSP
programs) grant the department discretion to use congestion pricing as
a priority consideration selection factor because tolling has a
rational connection to statutory objectives, such as mobility and
reduced congestion.
Table 4: Nine Grant Programs that Permit the Department to Use
Congestion Pricing/Tolling as a Selection Factor:
Program: Intelligent Transportation Systems-Operational Testing to
Mitigate Congestion (ITS-OTMC);
Authority to use congestion pricing/tolling: Statute expressly permits
the Secretary to consider ’toll collection“ as a factor.
Program: Interstate Maintenance Discretionary;
Authority to use congestion pricing/tolling: Statute permits the
department to use congestion pricing as a factor because it is
rationally related to statutory objectives, such as mobility and
congestion.
Program: Value Pricing Pilot;
Authority to use congestion pricing/tolling: Statute expressly permits
the Secretary to consider congestion pricing/tolling as a factor.
Program: Bus and Bus Facilities;
Authority to use congestion pricing/tolling: Statute grants the
department discretion to use congestion pricing as a priority selection
factor because no selection criteria are specified.
Program: Ferry Boat Discretionary;
Authority to use congestion pricing/tolling: Statute permits the
department to use congestion pricing as a factor because it is
rationally related to statutory objectives, such as mobility and
congestion.
Program: Innovative Bridge Research and Deployment;
Authority to use congestion pricing/tolling: Use of the term ’includes“
indicates the department has discretion to consider other factors.
Additionally, the statute permits the department to use congestion
pricing as a factor because it is rationally related to statutory
objectives, such as mobility and congestion.
Program: Public Lands Highway Discretionary;
Authority to use congestion pricing/tolling: Statute permits the
department to use congestion pricing as a factor because it is
rationally related to statutory objectives, such as mobility and
congestion.
Program: Transportation, Community, and System Preservation (TCSP);
Authority to use congestion pricing/tolling: Statute permits the
department to use congestion pricing as a factor because it is
rationally related to statutory objectives, such as mobility and
congestion.
Program: New Fixed Guideway Facilities (Very Small Starts);
Authority to use congestion pricing/tolling: Statute permits the
department to use congestion pricing as a factor because it is
rationally related to statutory objectives, such as mobility and
congestion.
Source: GAO.
[End of table]
Although we believe the department had authority to consider congestion
pricing as a selection factor, with respect to the Ferry Boat program,
the department's initial technical evaluation documentation suggested
(albeit incorrectly) that the department had exceeded its authority.
This technical evaluation documentation made it appear that the
department had overridden the statute by rejecting nonurban partners
that lacked congestion pricing but met one or more statutory priorities
in favor of urban partners that had congestion pricing but met no
statutory priorities. In making the final award decision, however the
Secretary relied on correct information showing the urban partners in
fact met statutory priorities. The Secretary therefore was within her
discretion to apply congestion pricing as a selection factor.
Specifically:
* Using congestion pricing as a priority selection factor, the
department awarded grants totaling $40.2 million under the Ferry Boat
program to New York City, San Francisco, and Seattle as urban partners.
Under this program, the department is authorized to award grants for
the construction of ferry boats and ferry terminal facilities in
accordance with statutory eligibility criteria.[Footnote 46] The Ferry
Boat grant statute lists three permissible "priority" selection factors
for Ferry Boat program grants that the department must apply. Priority
is required for ferry systems that will (1) provide critical access to
areas not well served by other modes of surface transportation, (2)
carry the greatest number of passengers and vehicles, or (3) carry the
greatest number of passengers in passenger-only service.
* Although the Ferry Boat statute does not explicitly identify
congestion pricing as a priority selection factor, the department
believes it had discretion to use congestion pricing to discriminate
between grant applicants. The department makes a connection between
congestion pricing and the second Ferry Boat statutory priority
(carrying large numbers of passengers and vehicles), which it believes
reflects congressional support for activities that increase mobility
and reduce congestion. We agree that the department had discretion to
use congestion pricing as a discriminating factor under the Ferry Boat
statute, because there is a rational connection between congestion
pricing, mobility, and congestion.
* The department could not, however, apply congestion pricing in a way
that would fail to comply with the statutory priority factors--that is,
it could not reject nonurban partners that met statutory priorities
simply because they lacked congestion pricing in favor of urban
partners that had congestion pricing but did not meet statutory
priorities. The department's technical evaluation documentation
incorrectly suggested that such a situation occurred in the case of one
grant, Seattle's High-Speed, Ultra-Low Wake Passenger-Only Ferry
project. Although the department's technical review team evaluator
appeared to have determined that this Seattle project failed to meet
two statutory priority selection criteria--carrying large numbers of
passengers and vehicles, and carrying a large number of passengers in
passenger-only service--the department nevertheless awarded the project
$2 million based on Seattle's urban partner designation, passing over
nonurban partners the technical review team had determined to have met
one or more of the statutory priorities. The technical review team
evaluator apparently reached this conclusion by incorrectly relying on
the total number of passengers carried by individual projects, not the
total number of passengers carried by the ferry system as a whole as
required by statute.[Footnote 47] In fact, Seattle's ferry system
carries the greatest number of passengers of all ferry systems in the
country, and therefore was entitled to "priority."
In addition, in one instance--the TCSP program, under which the
department awarded $50.4 million in grants to urban partners--we
concluded that although the department had discretion to use congestion
pricing as a discriminating priority factor, it likely did not apply
statutory "priority consideration" factors correctly, in the way the
statute requires. However, "priority consideration" entitles an
applicant only to a bona fide and careful review, not to guaranteed
selection. Furthermore, based on available information, it is not clear
that the department's incorrect evaluation approach affected the
ultimate outcome of its selections. As a result, we are not
recommending that the department re-evaluate the more than 500 grant
applications it received for fiscal year 2007 for this program.
Specifically:
* Using congestion pricing as a priority selection factor, the
department awarded three grants totaling $50.4 million under the TCSP
program to urban partner applicants--Minneapolis, San Francisco, and
Seattle. The statute requires that the department give "priority
consideration" only to applicants that meet five separate factors, none
of which explicitly relates to congestion pricing and all five of which
must be satisfied. The statute provides that priority consideration
shall be given to applicants that (1) have instituted preservation or
development plans and programs; (2) have instituted other policies to
integrate TCSP practices; (3) have preservation or development policies
that include a mechanism for reducing potential impacts of
transportation activities on the environment; (4) demonstrate a
commitment to public and private involvement, including the involvement
of nontraditional partners in the project team; and (5) examine ways to
encourage private-sector investments.
* The department believes that the term "priority consideration" does
not require the department to award grants to applicants that meet the
above criteria; instead, the department believes priority consideration
entitles an applicant only to precedential or careful deliberation or
thought before competing alternatives. We agree with the department
that, unlike "priority," "priority consideration" does not guarantee an
applicant selection. However, the department's reading, as we
understand it, is too narrow. We believe "priority consideration"
entitles an applicant to special attention and a careful and bona fide
review, not just consideration earlier in the evaluation process.
Nonetheless, ultimately, the department had discretion to grant awards
to applicants that did not meet priority consideration criteria, based
on other factors, such as congestion pricing, found to be rationally
connected to statutory objectives.
* The remaining issue is whether, before the department applied
congestion pricing as a selection factor, it followed the statute and
gave any applicants qualifying for "priority consideration" the bona
fide review Congress required. The answer is not clear. The statute
lists five factors, with the last two joined by the conjunctive "and,"
indicating all five factors must be met in order for an applicant to
receive priority consideration. Department review team officials told
us they rated grant applicants as meeting statutory priority
consideration criteria so long as just one factor was met (essentially
the reviewers treated the "and" in the statute as an "or"). We disagree
with the department's interpretation and believe the "and" is used in
its ordinary sense, requiring applicants to meet all five factors. Once
the department found that an applicant met one factor, it terminated
its evaluation. The effect of this error is unknown since, from the
current record, it is not possible to determine whether any applicant
met all five factors.
Appendix V contains a complete analysis of these legal issues and our
conclusions about the department's compliance.
The Department Has a Framework to Ensure That Award Conditions Are
Being Met and That Results Will Be Evaluated:
The department is tracking urban partners' progress in completing the
conditions of their awards, such as obtaining their authority to use
congestion pricing where needed. In addition, the department has
contracted with Battelle Memorial Institute to evaluate the outcomes of
UPA projects, such as the extent to which congestion is mitigated.
While progress is being made in these two areas, we did not attempt to
assess the overall reasonableness of these efforts because they are in
early stages.
The Department Is Monitoring Urban Partners' Completion of Award
Conditions:
The department's UPA initiative management team[Footnote 48] monitors
urban partners' completion of award conditions by tracking each urban
partner's progress in implementing congestion-reduction projects.
According to a department official, the UPA initiative management team
meets weekly in an effort to obtain and track real-time data from urban
partner sites and address issues as they occur. Typical meetings
consist of reports from department officials on the status of each
urban partner's planning efforts, federal fund obligations, and
environmental reviews. The UPA initiative management team identifies
and monitors the award conditions of UPAs in the following ways:
* Term sheet. Each urban partner entered into a term sheet, or
memorandum of understanding, with the department that includes the
urban partner's award conditions. Each term sheet describes the
congestion-reduction projects funded by the department, the amount of
funding to be obligated, and the responsibilities of the parties. A
department official told us that although not legally binding, the term
sheets formalize both the department's and the urban partners'
understanding of project requirements and deadlines, and provide the
department with a mechanism to track urban partners' progress in
meeting the award conditions.
* Funding agreements. Each urban partner has proposed to implement
several projects to reduce congestion. These projects are tied to
funding agreements that establish the amounts of funding to be provided
by the department, the grant programs that serve as the sources of
funding, and the conditions that must be met to ensure obligation of
federal funds. The content of these funding agreements varies and is
dependent on statutory and contractual requirements associated with
each funding source.
* Implementation matrix. The UPA initiative management team has created
an implementation matrix spreadsheet to track and update progress in
meeting requirements from the UPA term sheets and funding agreements.
For example, each urban partner's implementation matrix spreadsheet
tracks the following conditions contained in urban partner funding
agreements: (1) the completion of preconditions for obligating federal
funds, (2) UPA project funding sources, and (3) the dates federal funds
were (or were expected to be) obligated. The implementation matrix also
tracks award conditions contained in each UPA term sheet, including
initiative-driven conditions, such as legislative authority for
congestion pricing, and project-related award conditions, such as
environmental approval, planning, design, development, evaluation
requirements, and completion dates.
* Project management documentation. The UPA initiative management team
requires that each urban partner adhere to project management processes
and protocols. The department has requested that each urban partner
provide standard project management documentation that follows project
management standards,[Footnote 49] including project management plans,
project charters, baseline schedules and budgets, and progress reports.
These items will be tracked by the UPA initiative management team.
According to department officials, only Miami's UPA projects have
progressed far enough to require a significant amount of tracking, and
Miami officials have begun to provide project management documentation.
Seattle also has provided a draft project management plan in support of
its UPA. However, in anticipation of the other urban partners entering
the project implementation phase, the department is exploring the use
of software applications that fulfill project management standards and
can be used to track the urban partners' adherence to project
management documentation requirements.
The department has already taken steps to ensure that urban partners
complete their award conditions. For example, in April 2008, New York
City was unable to obtain the legal authority to do congestion pricing,
which was a selection condition of its UPA. As a result, New York City
lost its designation as an urban partner and the funding for its
congestion-reduction projects. In addition, in May 2008, the department
determined that the congestion-pricing project identified in San
Francisco's term sheet might not achieve the department's congestion-
reduction goals. As a result, the department decided not to release
about $100 million of San Francisco's UPA funding from several grant
programs[Footnote 50] until the city adopted a congestion-pricing
project that was acceptable to the department. (San Francisco did so in
October 2008.) A department official has indicated that the UPA
initiative management team will continue to monitor urban partners'
completion of award conditions throughout the implementation of UPA
initiative congestion-reduction projects.
We did not evaluate whether the implementation tracking was reasonable
or whether the award conditions were fulfilled, because projects have
not progressed far enough to make this determination.
The Department Plans to Evaluate Urban Partners' Strategies for
Reducing Congestion:
To oversee the development and implementation of the UPA evaluation,
the department created an evaluation subteam within the UPA initiative
management team. In April 2008, the department hired Battelle to
evaluate three urban partners: Minneapolis, San Francisco, and Seattle.
Battelle also was hired to provide technical assistance to New York
City and Miami, which both agreed to contract for and fund their own
evaluations.[Footnote 51] From these individual urban partnership
evaluations, including Miami, Battelle will develop a national
evaluation of the UPA initiative to generate conclusions about the
effectiveness of various types of congestion-reduction strategies.
The evaluation subteam manages Battelle's development and
implementation of the UPA evaluation process. For example, the UPA
evaluation subteam will approve central parts of Battelle's evaluation
framework, such as the site test plans that will detail data collection
and analysis activities for each urban partner site. In addition, a
department official has told us that for each urban partner site, the
evaluation subteam will coordinate with site officials and Battelle to
ensure the evaluation effort receives adequate support and is
appropriate for each site's projects.
The urban partnership evaluation will be completed in four phases. For
each phase, Battelle will produce a product that the UPA evaluation
subteam must approve. (See table 5.) According to Battelle, phase one-
-the initial evaluation strategy formulation--is complete, and phase
two is underway.
Table 5: Four Phases of the UPA Evaluation:
Phase: One;
Product: Initial evaluation strategy formulation;
Expected completion date: June 4, 2008;
Status[A]: Completed June 25, 2008.
Phase: Two;
Product: National evaluation framework development; Site-specific
evaluation plans;
Expected completion date: Draft submitted to the department on Sept. 5,
2008; Expected by Apr. 30, 2009[B];
Status[A]: Completed Nov. 21, 2008; Being drafted by Battelle.
Phase: Three;
Product: Evaluation monitoring and technical support
Expected completion date: Expected Mar. 30, 2009, to Mar. 25, 2011[B];
Status[A]: [Empty].
Phase: Four;
Product: Data analysis and report of findings;
Expected completion date: Expected May 13, 2009, to Aug. 25, 2011;
Status[A]: [Empty].
Source: Battelle Memorial Institute.
[A] Completion dates are based on the initial project plan submitted to
the department on June 13, 2008.
[B] Subject to change as projects are implemented.
[End of table]
The department identified four questions to be used in the urban
partnership evaluation. (See table 6.) As part of phase one, Battelle
then developed a number of evaluation analyses from these questions
that it presented to the department in an initial strategy briefing.
Battelle rated the evaluation potential of each urban partner using
these analyses, based on the analyses' applicability and feasibility.
Battelle defined applicability as the likelihood that each site will be
able to provide significant answers to the four evaluation questions
and feasibility as the likelihood that Battelle will be able to measure
the impact of project strategies to reduce congestion and determine
that those strategies are the cause of any improvement found. Since
Battelle will be relying on data collected by each urban partner site
to perform its evaluation, the department is working with urban
partners to ensure they will devote sufficient resources to data
collection.
Table 6: Evaluation Questions and Analyses for the UPA Evaluation:
Evaluation questions: How much was congestion reduced?
Evaluation analyses: Understand the extent to which the combined
congestion-reduction strategies reduced traffic congestion in study
routes/corridors and in adjacent routes/corridors.
Evaluation questions: What are the associated impacts of the
congestion-reduction strategies?
Evaluation analyses: Understand the contribution of the 4Ts to the
congestion impacts. Understand the associated impacts of the 4Ts on the
environment, movement of goods, businesses, and safety.
Evaluation questions: What are the lessons learned?
Evaluation analyses: Document a variety of lessons learned by the key
stakeholders implementing the congestion-reduction strategies.
Evaluation questions: What are the overall costs and benefits of the
strategies?
Evaluation analyses: Document public and private costs and consider the
benefits in relation to costs.
Source: Battelle Memorial Institute.
[End of table]
Battelle has delivered a draft national evaluation framework as part of
phase two of the evaluation process. The national evaluation framework
will act as a guide for site-specific evaluations and defines the
entire evaluation process. The department is reviewing the draft
framework. The national evaluation framework will be followed by site-
specific evaluation plans that provide a high-level view of data
collection, analyses to be performed, roles and responsibilities of
stakeholders, and schedules for urban partner sites. Minneapolis and
Seattle are the first sites scheduled, and the remaining sites will
follow. While Battelle is still working on finalizing future
deliverables, phase three will include the collection of pre-and
postdeployment data, and phase four will conclude the evaluation with
Battelle's report of findings. As of December 2008, the department had
not decided whether to release the reports as they are completed or in
a consolidated format at the end of the evaluation.
Miami proposed to fund and perform its urban partnership evaluation.
According to Florida Department of Transportation officials, Miami did
this to make its UPA application more competitive and because at the
time, Miami did not know that the department would provide funding for
this activity. Miami's UPA evaluation will also answer the four
evaluation questions. In September 2008, Miami provided the department
with a master transit evaluation matrix, which Miami officials have
described as a crosswalk between the variables Miami will measure and
the department's evaluation questions. In addition, to date, Miami has
hired a contractor to perform transit surveys and create lessons-
learned reports for its transit projects under the UPA initiative.
Miami will receive technical assistance from the department and from
Battelle, and will work with the University of South Florida's Center
for Urban Transportation Research to complete its evaluation. Battelle
and the department have noted that the urban partner evaluations will
differ somewhat, since all urban partners have different congestion-
reduction plans.
We did not determine whether the evaluation methodologies proposed by
Battelle or Miami were reasonable, because these methodologies have not
been fully developed.
Conclusions:
We support performance-based integrated approaches--such as the one the
department employed for the UPA initiative--because of the potential
for a greater impact than can be achieved by operating the component
programs in a stand-alone mode. Moreover, the initiative was a highly
complex activity undertaken relatively quickly to take advantage of
flexibilities allowed under the 2007 Revised Continuing Appropriations
Resolution and to produce results in a relatively short period of time.
With minor exceptions, the department did a good job of letting
applicants know which criteria it would use in selecting urban partners
and of the funding available for the initiative. However, the
department could have done a better job of letting applicants know
which of the dozen selection criteria it considered most important so
that applicants could tailor their applications accordingly.
The department acted within its legal authority in funding individual
grant programs to support the UPA initiative, and using congestion
pricing as a priority or priority consideration selection factor in
making award decisions under the individual grant statutes. In one
instance--the TCSP program--the statute required that "priority
consideration" be given to applicants meeting five specified factors,
and the department instead gave such consideration to applicants
(including urban partners) that met just one such factor. Because of
the department's approach, it is not possible to determine from the
documentation we reviewed whether any of the applicants in fact
qualified for priority consideration. However, because "priority
consideration," unlike "priority," entitles an applicant only to a bona
fide and careful review, not to guaranteed selection, and because the
department ultimately had discretion to use congestion pricing as a
discriminating priority factor, we are not recommending that the
department re-evaluate the more than 500 grant applications it received
for fiscal year 2007 for this program. Rather, in the future, the
department should evaluate these grant applications in accordance with
the statute, by awarding priority consideration only to applicants that
meet all five factors.
The department has promoted UPA goals and concepts in its proposed
successors to the UPA initiative--the Congestion Reduction
Demonstration and the Metropolitan Mobility programs.[Footnote 52] To
the extent that the department moves forward to select communities to
receive funds for these proposed initiatives and to allocate funds to
them, it must look back on the lessons learned from the UPA initiative
to ensure that the missteps identified in this report are not repeated.
This is especially important when the department employs a relatively
novel framework as an umbrella to integrate the underlying programs
that may fund these initiatives.
Recommendations for Executive Action:
We are making two recommendations. First, to better ensure that
potential applicants for future congestion relief initiatives are aware
of the criteria for assessing the applications, we recommend that the
Secretary of Transportation communicate all selection criteria--and the
relative weight to be given to the criteria--to potential applicants.
Second, for the Transportation, Community, and System Preservation
program, we recommend that the Secretary direct the Administrator,
FHWA, to give priority consideration only to applicants that meet all
five statutory factors, as required by the grant statute.
Agency Comments and Our Evaluation:
The department reviewed a draft of our report and generally agreed with
most of its findings. The department indicated that it was considering
the recommendations; however, it indicated that the recommendation
concerning the Transportation, Community, and System Preservation
program will require careful legal analysis by the agency.
Overall, the department told us that it views performance-based
initiatives, such as the UPA initiative, as critical tools for applying
its limited discretionary funding to achieve the greatest possible
congestion reduction. The department said that the UPA initiative also
made use of other best practice approaches. For example, the department
incorporated an intermodal perspective for assessing program applicants
based on established and publicized criteria. Intermodal teams assessed
the merits and viability of proposals under the leadership of the
Office of the Secretary to ensure that funding was awarded in a manner
consistent with statute and regulation, to those projects that offered
the most significant congestion relief benefits. The department also
emphasized that it used extensive outreach to potential participants,
because the program's dynamic environment made it particularly
important to ensure clear, consistent, and effective communication. The
department indicated that it made its expertise available to all
potential applicants on an ongoing basis from the outset of the
program. Finally, the department stated that the UPA initiative
incorporates elements for assessing results, so that information can be
obtained for consideration in future efforts of this type.
Our draft report stated that the department appeared to give
Minneapolis proactive assistance in crafting a stronger application
before the department selected the city as a preliminary urban partner.
We concluded that this action was inappropriate and tendered a draft
recommendation on this issue. The department took exception to our
discussion that it provided Minneapolis assistance at this point of the
evaluation process. The department maintained that it did everything
possible to ensure these interactions were consistent and fair to all
applicants, and did not agree that its discussions with Minneapolis or
any potential applicants were either unfair or inappropriate. As a
result, we had additional discussions with Minneapolis officials and
reviewed documentary evidence which showed that the department provided
assistance to Minneapolis after it was selected as a preliminary urban
partner, similar to Miami. As a result, we revised our draft report
accordingly and removed the draft recommendation.
The department offered several technical comments, which we have
incorporated where appropriate.
We are sending copies of this report to other congressional committees
and subcommittees with responsibility for highway mobility issues; the
Secretary of Transportation; the Administrator, Federal Highway
Administration; the Administrator, Federal Transit Administration; the
Administrator, Research and Innovative Technology Administration; and
the Director, Office of Management and Budget. This report will be
available at no charge on the GAO Web site at [hyperlink,
http://www.gao.gov].
If you have any questions about this report, please contact either
Susan Sawtelle, Managing Associate General Counsel at (202) 512-6417 or
sawtelles@gao.gov; or me at (202) 512-2834 or siggerudk@gao.gov.
Contact points for our Offices of Congressional Relations and Public
Affairs may be found on the last page of this report. Staff who made
key contributions to this report are listed in appendix VI.
Signed by:
Katherine A. Siggerud:
Managing Director, Physical Infrastructure Issues:
List of Congressional Committees:
The Honorable Patty Murray:
Madam Chairman:
The Honorable Christopher S. Bond:
Ranking Member:
Subcommittee on Transportation, Housing and Urban Development, and
Related Agencies:
Committee on Appropriations:
United States Senate:
The Honorable John Olver:
Chairman:
The Honorable Tom Latham:
Ranking Member:
Subcommittee on Transportation, Housing and Urban Development, and
Related Agencies:
Committee on Appropriations:
House of Representatives:
The Honorable James Oberstar:
Chairman:
The Honorable John Mica:
Ranking Republican Member:
Committee on Transportation and Infrastructure:
House of Representatives:
The Honorable Peter DeFazio:
Chairman:
The Honorable John Duncan:
Ranking Member:
Subcommittee on Highways and Transit:
Committee on Transportation and Infrastructure:
House of Representatives:
[End of section]
Appendix I: Department of Transportation Actions to Select Corridors of
the Future and Ensure Transportation Benefits:
In May 2006, the Department of Transportation (the department)
established Corridors of the Future (Corridors) as a demonstration
program to accelerate the development of multistate transportation
corridors to reduce congestion. In designating such corridors, the
department followed criteria that it communicated to potential
applicants. In addition, the department has established a framework to
ensure that states will work together and that Corridor projects will
come to fruition and produce transportation benefits.
Background:
In September 2006, the department issued a Federal Register notice
soliciting applications for Corridors, which is a major component of
its congestion-reduction initiative. This program is to accelerate the
development of multistate transportation corridors, for one or more
transportation modes, in need of investment to reduce congestion. The
department also encouraged participation by sending an e-mail to
transportation groups and by citing the program's benefits in speeches.
According to department officials, another purpose of the demonstration
program is to encourage states to work together, rather than acting
separately, to reduce congestion along major transportation corridors.
The department solicited applications for Corridors in two phases. For
phase one, the department asked for proposals containing general
information about the proposed corridor, such as its location, purpose,
preliminary design features, and estimated capital costs. The
department received 38 proposals and established a review team
comprising representatives from the department's surface transportation
administrations, with expertise in finance, environment and planning,
and infrastructure. In accordance with the review team's
recommendations, the department announced it had selected eight
potential corridors to submit applications for phase two. The phase two
applications were more detailed than the phase one proposals and
supplied information on the corridor's physical description, congestion-
reduction goals, mobility improvements, economic benefits and support
of commerce, value to users, innovations in project delivery and
finance, environmental stewardship, finance plan, and proposed project
timeline. Several state officials told us that the process of
completing proposals or applications for Corridors fostered cooperation
between states and began discussions about multistate efforts to reduce
congestion that would not have happened otherwise.
On September 14, 2007, relying on the recommendations of the review
team, the department announced its selection of six corridors:
Interstate 95, Interstate 15, Interstate 5, Interstate 10, Interstate
70, and Interstate 69. (See figure 4.)
Figure 4: Locations of the Six Corridors of the Future:
[Refer to PDF for image: map of the United States]
The locations of the six corridors are indicated on the map.
Sources: U.S. Department of Transportation (data); and MapArt (base
map).
[End of figure]
Designation as a corridor did not include an award of funds, but did
give individual corridors priority access to department resources such
as funding from grant programs and administrative flexibilities, such
as environmental streamlining. Each corridor proposed a series of
improvement projects that collectively totaled about $106 billion and
individually ranged in cost from about $8.5 million to $63 billion.
However, because of funding limitations, the department strategically
chose where to best utilize funds and only selected one or two projects
per corridor. For example, Interstate 10 proposed about $6.7 billion in
high-priority projects in several areas: security, incident management,
traveler information systems, traffic management, multiagency
coordination, and capital projects. Following Interstate 10's
designation as a corridor, the department provided $8.6 million in
funding for two projects within this corridor. (See table 7.) In all,
the department provided $66.2 million in funding from five grant
programs for 10 projects in the six corridors.
Table 7: Corridors Projects That Received Funding:
Corridor: Interstate 95:
Project description: North Carolina will use Interstate Maintenance
Discretionary program funds to widen the interstate (including
additions to lanes and ramp capacity improvements) and increase
vertical clearances for bridges;
Amount awarded: $21.0 million.
North Carolina will use Transportation, Community, and System
Preservation (TCSP) program funds to install sensors and dynamic
message signs;
Amount awarded: $0.8 million.
Corridor: Interstate 15:
Project description: Nevada will use Public Lands Highway Discretionary
program funds for environmental work to expand the number of lanes in
and around Las Vegas, realign off ramps at one interchange, and widen
the roadway to support managed or express lanes;
Amount awarded: $10.0 million.
California will use Highways for Life program funds to replace concrete
on an existing section of roadway;
Amount awarded: $5.0 million.
Corridor: Interstate 5:
Project description: Washington will use Interstate Maintenance
Discretionary program funds for environmental and predesign work and a
right-of-way purchase for a new bridge across the Columbia River
between Oregon and Washington;
Amount awarded: $15.0 million.
Corridor: Interstate 10:
Project description: Arizona will use Interstate Maintenance
Discretionary program funds to widen a section of the interstate;
Amount awarded: $4.0 million.
Louisiana will use Delta Region Development program funds to construct
additional lanes and add auxiliary lanes;
Amount awarded: $4.6 million.
Corridor: Interstate 70:
Project description: Missouri will use Interstate Maintenance
Discretionary program funds for an environmental study to evaluate the
impact of adding two dedicated truck lanes in each direction along the
interstate;
Amount awarded: $2.0 million.
Indiana will administer TCSP program funds for a corridor-wide study to
evaluate the feasibility of constructing truck-only lanes along the
interstate;
Amount awarded: $3.0 million.
Corridor: Interstate 69:
Project description: Arkansas will administer TCSP program funds for a
corridor-wide study to identify sources of innovative financing for
projects on the corridor;
Amount awarded: $0.8 million.
Total:
Amount awarded: $66.2 million.
Source: GAO presentation of Department of Transportation information.
[End of table]
The department is developing agreements for how the states along each
corridor will work together to develop their corridor. As of February
2009, the department finalized agreements for three corridors.
According to a department official, the department is working to
finalize the remaining three agreements by the end of December 2009.
The Department Selected Awardees for Corridors by Following Its
Published Criteria:
Beyond the general information requested for phase I proposals, the
September 2006 Federal Register notice provided nine criteria for
reviewing phase two applications. Specifically, the proposals and
applications were to include:
* a description of the corridor,
* proposed strategies for reducing congestion,
* planned mobility improvements,
* expected economic benefits and support of commerce,
* estimated value to users of the corridor,
* innovative project delivery and financing features,
* evidence of exceptional environmental stewardship,
* a finance plan and opportunities for private-sector participation,
and:
* a proposed project timeline.
In reviewing both the phase one proposals and phase two applications,
the department applied the criteria stated in the Federal Register and,
according to the department, gave equal weight to all the criteria.
According to the Office of Management and Budget policy directive
described earlier in this report, since the selection criteria for
Corridors did not vary in importance, it was not necessary for the
department to describe the weights of the criteria in its funding
announcements.
Amount of Funding Available under Corridors Was Unclear and Most Funds
Awarded to Projects Were Requested in Applications:
As discussed earlier in this report, grant announcements should provide
a complete description of the funding opportunity to give applicants a
sense of the scope of the funding, and to assist them in prioritizing
and developing proposals for projects. The September 2006 Federal
Register notice did not state a specific amount of funding available to
corridors through grant programs. However, the Federal Register notice
did state that (1) if a corridor was selected for participation in the
Corridors program, the department would work with the corridor to
identify possible funding sources and (2) the department would select
up to five corridors (although six were ultimately selected). The
Federal Register notices soliciting Corridors proposals and
applications were issued before February 15, 2007, when the President
signed the department's fiscal year 2007 appropriation without any
congressional directives that funds be dedicated for particular
projects. Therefore, department officials told us that, at the time
Corridors proposals and applications were solicited, the department did
not know to what extent funds would be available for allocation to
Corridors projects.
Department officials told us that in April 2007, the department sent
out an e-mail to phase two applicants stating that $329 million, from
eight Federal Highway Administration (FHWA) grant programs, was
available to applicants that met the grant programs' respective
statutory criteria and emphasized the proposed projects' highway safety
and congestion-reduction benefits. However, it was not clear in this
document what portion of the $329 million would be dedicated to
Corridors. According to the department, the level of funding that would
be allocated to Corridors was unknown at this time. In July 2007, the
department set aside $66.2 million for Corridor designees and funded 10
projects. This sum represented the amount remaining after funds were
set aside for congressionally directed activities, urban partnership
agreements (UPA), and other grant programs. Department officials told
us that after identifying the six corridors, they called each corridor
to solicit projects that could be funded.
For 9 of the 10 funded Corridors projects, we found corresponding
projects listed in the respective Corridors applications. However, the
Corridors application for Interstate 10 did not include an Arizona
project to widen a section of this highway. Officials from the Florida
and Texas Departments of Transportation who served as the points of
contact for the Interstate 10 Corridors project told us they did not
receive telephone calls from the department soliciting projects for
funding in the Interstate 10 corridor. Rather, these officials told us
that Arizona received Corridors funding for a project that was not
listed in the Interstate 10 Corridors application and therefore was not
a priority for the corridor. According to the department, it was not
necessary for a project to be listed in a Corridors application for the
project to be funded. Instead, the department said, it gave priority
consideration in its funding decisions to parties designated as
corridors. In our opinion, this approach appears to act at cross
purposes to the department's goal of encouraging multistate
collaboration to address pressing congestion along corridors.
The Department Plans to Ensure Award Conditions Are Met and Assess the
Results:
The department is developing an agreement for each corridor on how the
states will work together to plan, develop, finance, construct, and
maintain the corridor. As of February 2009, the department had
finalized agreements for three corridors. According to a department
official, the department is working to finalize the remaining three
agreements by the end of December 2009. Each agreement will establish
the objectives for developing the respective corridor. The department
is asking the signatory states to use the following objectives as the
guiding principles for development:
* Promote innovative national and regional approaches to congestion
mitigation.
* Address major transportation investment needs.
* Illustrate the benefits of alternative financial models that involve
private-sector capital.
* Promote a more efficient environmental review and project development
process.
* Develop corridors that will increase freight system reliability and
enhance the quality of life for citizens.
* Demonstrate the viability of a transportation investment model based
on sound economics and market principles.
Each agreement will require that the signatory states develop a
multistate approach to developing and managing the corridor. The
department is asking that the states execute a memorandum of
understanding among themselves, with the department's concurrence, that
sets forth how the states will collaborate to support each other in
corridor activities. To ensure that the signatory states are speaking
with one voice, the department is asking each corridor to establish a
committee that can represent the states and negotiate on behalf of the
corridor with the department.
Each agreement also will include specific requirements for developing
and operating the corridor. The department is asking the signatory
states to develop a process under which each project will be subject,
as applicable, to specific development goals to ensure coordinated
planning, financing, construction, operation, maintenance, and
performance of the corridor. The department is also encouraging the
signatory states to cooperatively develop a method to select projects
and establish a schedule for project delivery. The department would
like the signatory states to create and maintain a schedule that will
establish priorities for undertaking projects and obtaining funding
from different sources.
Lastly, each agreement will address the development of a performance
plan for the corridor, including operations and management performance
goals and expectations, and methods to measure travel time and
reliability. Beginning 1 year after the effective date of the agreement
and regularly thereafter, the department will ask the signatory states
to report to the department on the corridor's performance and progress.
[End of section]
Appendix II: The Department Actively Promotes Public-Private
Partnerships to Reduce Highway Congestion:
In February 2008, we reported that the department encourages and
promotes the use of highway public-private partnerships through policy
and practice, including the development of experimental programs that
waive certain federal regulations and encourage private
investment.[Footnote 53] The department believes that public-private
partnerships have the potential to reduce highway congestion, among
other things.
Since our report, the department has taken additional steps to promote
highway public-private partnerships through programs and practice. This
appendix updates our prior report on the activities the department has
used to promote public-private partnerships. We did not assess these
new efforts.
Departmental Programs Promote Public-Private Partnerships:
Since our February 2008 report, the department has extended credit and
credit support under the Transportation Infrastructure Finance and
Innovation Act program to two public-private partnerships. This act
authorizes the department to provide secured (direct) loans, lines of
credit, and loan guarantees to public and private sponsors of eligible
surface transportation projects. For example, in December 2007, under
the Transportation Infrastructure Finance and Innovation Act, the
department allocated $589 million for Virginia's Capital Beltway high-
occupancy toll lanes project, which will use congestion pricing to
ensure reliable traffic flow on one of the nation's most congested
highways. In addition, in March 2008, the department allocated $430
million for segments of Texas state highway 130, which will form part
of a new 91-mile tollway intended to relieve congestion on Interstate
35. Both transactions involved a partnership between private borrowers
and a state.
In addition, as of December 2008, the department had allocated about
$9.2 billion in private activity bonds to eight public-private
partnerships.[Footnote 54] The Safe, Accountable, Flexible, Efficient
Transportation Equity Act--A Legacy for Users (SAFETEA-LU) amended the
Internal Revenue Code to add qualified highway or surface freight
transfer facilities to the types of privately developed and operated
projects for which tax-exempt facility bonds (a form of private
activity bonds) may be issued. For example, the department allocated
$980 million for private activity bonds to a group of private companies
that are planning to build a tunnel connecting the Port of Miami on
Dodge Island with Watson Island and Interstate 95 on the Florida
mainland.[Footnote 55] However, according to a department official, not
all of the $9.2 billion allocated in private activity bonds has been
issued. In addition, according to this official, the department is
currently reviewing applications for additional private activity bond
allocations to other public-private partnerships.
Finally, the department plans to study projects that use methods of
procurement that integrate risk and streamline project development.
SAFETEA-LU established the Public-Private Partnership Pilot Program,
known as Penta-P, to evaluate the benefits of forming public-private
partnerships for new construction projects. In 2007, the department
executed agreements for three pilot projects: the first is a single
contract for the construction of two light rail lines in Houston,
Texas, that will ultimately serve the city's two main airports; the
second is a contract in Denver, Colorado, for two rail projects that
will serve the Denver airport and northwest Denver; and the third is a
contract in Oakland, California, for a transit system that will connect
the Oakland International Airport with the San Francisco Bay Area Rapid
Transit District's Coliseum Station. According to a department
official, construction on the projects has not begun. Denver is
contemplating an innovative contract that increases risk sharing
between the private partner and the local, state, and federal
governments. In this agreement, the Denver Regional Transportation
District will ask its private partner to assume a degree of risk by
contributing equity capital to the project. This capital will be at
risk until the project is operating and collecting revenue. In
addition, the Metropolitan Transit Authority of Harris County, Texas,
is contemplating an innovative contract under which a "facility
provider" will share risk with the vehicle provider, construction firm,
and operator. Also, the project's development will be streamlined,
since the private partner will coordinate all work with the contractor,
vehicle provider, and operator. As these projects proceed, the
department will study how public-private partnerships affect completion
times, projections of project costs and benefits, and project
performance. Lastly, the San Francisco Bay Area Rapid Transit District
plans to use an innovative contract where a consortium of private firms
will assume the risk to design, build, operate, maintain, and finance
the project.
The Department Promotes Public-Private Partnerships through Multiple
Practices:
The department has promoted public-private partnerships in the
following ways:
* Developing publications. In July 2008, the department published a
report that describes the use of public-private partnerships by
transportation authorities and updates the department's 2004 report to
Congress on public-private partnerships.[Footnote 56]
* Drafting model legislation for states to consider highway public-
private partnerships within their jurisdiction. The model legislation
addresses such subjects as bidding, agreement structures, reversions of
the facilities to the state, remedies, bonds, federal funding, and
property tax exemptions, among other things. In July 2008, the
department published a framework for overhauling the way transportation
decisions and investments are made.[Footnote 57] Specifically, the
framework recommends the use of public-private partnerships, expansion
of Transportation Infrastructure Finance and Innovation Act program
capacity, and removal of the $15 billion cap on private activity bonds
administered by the department. In addition, the department is
currently developing guidance on the use of public-private partnerships
by procurement agencies. This guidance will describe how federal,
state, and local officials have structured public-private partnerships.
* Maintaining a public-private partnership Internet Web site. This Web
site serves as a clearinghouse for information to states and other
transportation professionals about public-private partnerships,
pertinent federal regulations, and financing options.[Footnote 58]
* Making public presentations. Department officials have made public
speeches and written at least one letter to a state in support of
highway public-private partnerships. Officials of the department also
have testified before Congress in support of highway public-private
partnerships. Since February 2008, the department has conducted
workshops on the structure and rationale for public-private
partnerships. For example, in October 2008, the department gave a
presentation at a transit conference on how public-private partnerships
can be used to address funding shortages in highway infrastructure
projects.
* Making public-private partnerships a key component of congestion
mitigation. Two major parts of the department's May 2006 national
strategy to reduce congestion are the UPA initiative and Corridors. In
August 2007, the department awarded funds to five urban partners that
would make congestion pricing a key component of congestion mitigation.
Such a strategy could act to promote highway public-private
partnerships, since tolls provide a long-term revenue stream, key to
attracting investors. In September 2007, the department awarded funds
to six interstate routes for use in developing multistate corridors to
help reduce congestion. These six interstates were selected for their
potential to use private resources to reduce traffic congestion within
the corridors and across the country.
* Encouraging public-private partnerships in its reform proposal to
Congress. In July 2008, the Secretary announced the administration's
new plan to create a more sustainable way to pay for and build roads
and transit systems. This plan includes a proposal for leveraging
federal resources. Among other things, this proposal encourages states
and metropolitan areas to explore innovative transportation financing
mechanisms by expanding the use of public-private partnerships. For
example, the administration's plan proposes that all federal aid
projects with a total cost of over $250 million would not receive
federal assistance unless the project sponsor first compared the
project's lifecycle costs under the most cost-effective form of
conventional public procurement with the project's lifecycle costs if
procured using a public-private partnership (assuming state law allows
for public-private partnership procurement).
[End of section]
Appendix III: Extent to Which Previous Recipients of Grant Programs
Received UPA Initiative and Corridors Funding:
[End of section]
This appendix provides information on the extent to which previous
recipients of grants provided through 11 programs received funds under
the UPA initiative and Corridors.[Footnote 59] To develop this
information, we compared the amounts of funds states were allocated
during fiscal years 2004 through 2006 with the amounts awarded for the
UPA initiative and Corridors in fiscal year 2007.
Urban partners were awarded about 26 percent of the funding provided
through the 11 grant programs in fiscal year 2007, while Corridors
states were awarded 2 percent of the funding provided through those
grant programs. (See figure 5.) For fiscal years 2004 through 2006,
about $6.9 billion was allocated through the 11 grant programs to 50
states and the District of Colombia, in amounts ranging from about $319
million on average per year (California) to $2.4 million on average per
year (Wyoming). The top 10 states, in descending order of grant size,
were California, New York, Illinois, New Jersey, Washington,
Pennsylvania, Colorado, Maryland, Arizona, and North Carolina. Three of
the top 10 states had urban partners (California, New York, and
Washington), and two of these states were involved in a Corridors
project that received funding (California and Washington) in fiscal
year 2007. In fiscal year 2007, about $2.8 billion was awarded through
the 11 grant programs. Of this amount, about $715 million was awarded
to urban partners and about $66 million was awarded to Corridors states
through grants ranging from about $328 million (New York) to $1.1
million (Arkansas).
Figure 5: Comparison of Funding Provided through 11 Grant Programs to
Top 10 States and to UPA Initiative and Corridors States:
[Refer to PDF for image: three pie-charts]
All programs, fiscal years 2004-2006:
North Carolina: 3% ($68 million);
Arizona: 4%; ($83 million);
Maryland: 4%; ($96 million);
Colorado: 4%; ($98 million);
Pennsylvania: 5%; ($109 million);
Washington: 5%; ($120 million);
New Jersey: 6%; ($139 million);
Illinois: 7%; ($164 million);
New York: 10%; ($221 million);
California: 14%; ($319 million);
All others: 39%; ($892 million).
All programs, fiscal year 2007:
Corridors: 2%; ($66 million);
Florida: 2%; ($63 million);
Washington: 3%; ($79 million);
Minnesota: 4%; ($111 million);
California: 5%; ($134 million);
New York: 12% ($328 million);
All others: 73%; ($2.1 billion).
Urban partners: Florida, Washington, Minnesota, California, New York.
Breakdown of corridors allocation:
Arkansas: 2%; ($1 million);
Missouri: 3%; ($2 million);
Indiana: 5%; ($3 million);
Arizona: 6%; ($4 million);
Louisiana: 7%; ($5 million);
California: 8%; ($5 million);
Nevada: 15%; ($10 million);
Washington: 23%; ($15 million);
North Carolina: 33%; ($22 million).
Source: GAO analysis of Department of Transportation information.
Note: The dollar amounts for all programs, fiscal years 2004-2006, are
an average annual allocation over 3 years.
[End of figure]
Urban partners were awarded about 22 percent of the funding provided
through the two largest grant programs, Bus and Bus-Related Facilities
Capital Investment Grants (Bus and Bus Facilities) and New Starts/Small
Starts, in fiscal year 2007. (See figure 6.) For fiscal years 2004
through 2006, about $6.4 billion was allocated through Bus and Bus
Facilities and New Starts/Small Starts to 50 states and the District of
Colombia, in amounts ranging from about $307 million on average per
year (California) to $900,000 on average per year (Wyoming). The top 10
states, in descending order of grant size, were California, New York,
Illinois, New Jersey, Pennsylvania, Washington, Colorado, Maryland,
Arizona, and North Carolina. Three of the top 10 states had cities
designated as urban partners (California, New York, and Washington) and
3 of the top 10 states were part of a Corridors project that received
funding (Arizona, California, and Washington) in fiscal year 2007. In
fiscal year 2007, about $2.4 billion was awarded through the Bus and
Bus Facilities and New Starts/Small Starts programs. Of this amount,
$530 million was awarded to urban partners in grants ranging from about
$326 million (New York) to $19.5 million (Florida). In fiscal year
2007, no funding was awarded for Corridors projects from Bus and Bus
Facilities and New Starts/Small Starts.
Figure 6: Comparison of Funding Provided through the Bus and Bus
Facilities and New Starts/Small Starts Programs to Top 10 States and to
UPA Initiative and Corridors States:
[Refer to PDF for image: two pie-charts]
Bus/Facilities and New Starts, fiscal years 2004-2006:
North Carolina: 3% ($65 million);
Arizona: 4%; ($78 million);
Maryland: 4%; ($91 million);
Colorado: 4%; ($93 million);
Washington: 5%; ($104 million);
Pennsylvania: 5%; ($105 million);
New Jersey: 6%; ($135 million);
Illinois: 8%; ($162 million);
New York: 10%; ($218 million);
California: 14%; ($307 million);
All others: 36%; ($770 million).
Bus/Facilities and New Starts, fiscal year 2007:
Florida: 1%; ($20 million);
Washington: 2%; ($41 million);
California: 2%; ($58 million);
Minnesota: 4%; ($86 million);
New York: 13% ($326 million);
All others: 78%; ($1.9 billion).
Urban partners: Florida, Washington, Minnesota, California, New York.
Source: GAO analysis of Department of Transportation information.
Note: The dollar amounts for Bus and Bus Facilities and New Starts/
Small Starts for fiscal years 2004 through 2006 are an annual average
allocation over 3 years.
[End of figure]
Urban partners were awarded about 54 percent of the funding provided
through the remaining 9 grant programs in fiscal year 2007, while
Corridors states were awarded about 21 percent of the funding provided
through those programs. (See figure 7.) In fiscal years 2004 through
2006, about $547 million was awarded through the remaining 9 grant
programs to 50 states and the District of Colombia, in amounts ranging
from about $17 million on average per year (Washington) to about
$500,000 on average per year (New Hampshire). The top 10 states, in
descending order of grant size, were Washington, Alaska, California,
Utah, Kentucky, Nevada, Colorado, Mississippi, Texas, and Alabama. Two
of the top 10 states had cities designated as urban partners
(California and Washington) and 3 of the top 10 states were part of a
Corridors project that received funding (California, Nevada, and
Washington) in fiscal year 2007. In fiscal year 2007, about $315
million was awarded through the 9 grant programs. Of this amount, about
$169 million was awarded to urban partners and about $66 million was
awarded to Corridors states through grants ranging from about $61
million (California) to $1.1 million (Arkansas).
Figure 7: Comparison of Funding Provided through 9 Remaining Grant
Programs to Top 10 States and to UPA Initiative and Corridors States:
[Refer to PDF for image: three pie-charts]
Other programs, fiscal years 2004-2006:
Alabama: 3% ($5 million);
Mississippi: 3%; ($5 million);
Texas: 3%; ($5 million);
Colorado: 3%; ($6 million);
Nevada: 3%; ($6 million);
Kentucky: 4%; ($7 million);
Utah: 7%; ($7 million);
California: 8%; ($12 million);
Alaska: 8%; ($14 million);
Washington: 9%; ($17 million);
All others: 54%; ($99 million).
Other programs, fiscal year 2007:
Corridors: 21% ($66 million);
New York: 1% ($2 million);
Minnesota: 8%; ($25 million);
Washington: 12%; ($38 million);
Florida: 14%; ($43 million);
California: 19%; ($61 million);
All others: 80%; ($80 million).
Urban partners: Florida, Washington, Minnesota, California, New York.
Breakdown of corridors allocation:
Arkansas: 2%; ($1 million);
Missouri: 3%; ($2 million);
Indiana: 5%; ($3 million);
Arizona: 6%; ($4 million);
Louisiana: 7%; ($5 million);
California: 8%; ($5 million);
Nevada: 15%; ($10 million);
Washington: 23%; ($15 million);
North Carolina: 33%; ($22 million).
Source: GAO analysis of Department of Transportation information.
Note: The dollar amounts for the 9 remaining grant programs, fiscal
years 2004-2006, are an annual average allocation over 3 years.
[End of figure]
[End of section]
Appendix IV: Scope and Methodology:
[End of section]
To determine the extent to which the department communicated
information about the selection criteria and funding for the UPA
initiative, applied the criteria, and selected applicants for grant
awards, we analyzed department publications, such as Federal Register
notices on the UPA initiative and its underlying grant programs, and
UPA initiative outreach materials, such as presentation slides and
handouts. To understand how UPA applicants understood this information
about the selection criteria and funding, we interviewed
representatives of 14 of the 26 UPA applicants, including all of the 9
preliminary urban partners and 5 of the 17 unsuccessful UPA applicants,
which we selected at random. Because the department did not track which
applicants received particular outreach materials, we had to rely on
these interviews with applicants to analyze the extent to which the
department communicated information about the selection criteria and
funding. Additionally, we spoke with representatives of five randomly
selected cities that did not apply to the UPA initiative but had been
identified by the department's Volpe National Transportation Systems
Center as having extreme or high levels of congestion. We also spoke
with officials of three national professional transportation groups
about their role, if any, in communicating information on the UPA
initiative to potential applicants and their understanding of UPA
selection criteria and funding.
In determining good grants practices, we reviewed grants policies from
the department and its agencies--particularly FHWA--as well as other
government agencies, such as the Departments of Energy, Commerce, and
Labor. Furthermore, we reviewed several of our reports on competitive
discretionary grants and grants guidance from the Office of Management
and Budget and the Guide to Opportunities for Improving Grant
Accountability developed by the Domestic Working Group Grant
Accountability Project.
In examining how the department applied UPA selection criteria, we
reviewed and analyzed department documents such as the 26 UPA
applications, the department's instructions for UPA application
reviewers, the results of the reviewers' assessments of applications,
and documentation of the reviews conducted by senior department
officials. We compared the department's review of UPA applications,
particularly the criteria used, with the criteria listed in Federal
Register notices and reviewed other materials made available to
applicants, such as a UPA frequently asked questions document. We also
spoke with senior department officials about their application of the
UPA selection criteria and their UPA funding decisions. Additionally,
we also spoke with 8 of the 11 department officials who served on the
UPA application review team and with senior department officials about
their reviews of UPA applications.
To assess whether the department had authority to allocate grant funds
to support the UPA initiative and give priority consideration in
allocating individual grants to support projects that involve
congestion pricing, we analyzed the department's fiscal year 2006
appropriation, the fiscal year 2007 revised continuing resolution, the
applicable authorizing legislation, and relevant case law and other
legal authorities. We obtained the department's legal position
regarding its authority in these areas through formal and informal
correspondence and through discussions with the department's General
Counsel and other senior department officials. We reviewed the
department's documentation of its technical evaluation team application
review for several grant programs: the Intelligent Transportation
Systems-Operational Testing to Mitigate Congestion; Interstate
Maintenance Discretionary; Ferry Boat Discretionary; Public Lands
Highway Discretionary; and Transportation, Community, and System
Preservation programs. We also spoke with department staff members that
manage the four grant programs to determine how they reviewed and
ranked applications. We selected these grant programs because their
statutes authorize the department to give priority or priority
consideration to certain categories of applicants.
To describe the steps the department is taking to ensure that award
conditions are met and that results will be evaluated, we reviewed
documents on the department's actions to monitor UPA award conditions
and plans to evaluate each urban partner's projects to reduce
congestion. Specifically, we reviewed urban partners' term sheets (or
memorandums of understanding) with the department and grant and
cooperative agreements that list the conditions to receive federal
funds. We also reviewed documents from Battelle Memorial Institute's
plans to evaluate UPAs. In addition, we interviewed officials from the
department, Battelle Memorial Institute, and Miami about their plans
for implementing and evaluating projects.
To determine how the department applied the criteria and selected
applicants for grant awards for Corridors, we reviewed all phase one
and phase two applications, the September 2006 Federal Register notice,
and the guidance given to review team members. In addition, we spoke
with 10 of the 38 Corridors applicants. Of these, 5 applied to phase
one and were not invited to apply to phase two, 1 applied to phase two
but was not selected, and 4 were designated as corridors. To understand
the department's review of Corridors applications, we spoke with six of
eight review team members. In addition, to describe the steps the
department is taking to ensure that selection conditions are met and
results are assessed, we reviewed Corridors development agreements,
which state performance objectives and the conditions for receiving
federal funds. We also spoke with the department officials responsible
for managing five grant programs to understand how the program managers
will monitor and evaluate Corridors projects.
To determine what actions the department has taken to support public-
private partnerships to reduce highway congestion, we reviewed several
documents, such as the department's 2006 National Strategy to Reduce
Congestion on America's Transportation Network, documents on the
department's public-private partnership Web site, and our reports on
public-private partnerships. We also interviewed department officials
on actions the department has taken.
To identify the previous recipients of funding from the 13
discretionary grant programs used to fund the UPA initiative and
Corridors, we collected funding information for fiscal years 2004
through 2007 from FHWA and the Federal Transit Administration and
compared the recipients of those funds and the amounts they received
for fiscal years 2004 through 2006 with UPA and Corridors recipients
and the amounts they received in 2007. We assessed the reliability of
the data by interviewing knowledgeable department officials about data
collection methods, particularly those pertaining to funds allocated to
states for fiscal years 2004 through 2007 from the 13 grant programs.
We determined that the data were sufficiently reliable for the purposes
of this report.
[End of section]
Appendix V: The Department's Legal Compliance in Awarding Grants to
Support the UPA Initiative:
Introduction and Summary of Conclusions:
As part of our review of the department's National Strategy to Reduce
Congestion on America's Transportation Network, we examined whether,
for fiscal year 2007, the department had legal authority to allocate
its lump-sum appropriations to 10 existing discretionary grant programs
in order to "fund" the UPA initiative, and if so, whether the
department could use tolling (specifically, congestion pricing) as a
priority or priority consideration factor in deciding which applicants
would be awarded grants under those programs.[Footnote 60]
We conclude that because there were no statutory designations of
funding for specific projects or programs in fiscal year 2007--no
legally binding "earmarks" or other directives--the department had
authority to allocate its lump-sum appropriations to its existing
discretionary grant programs. The department's appropriations were
available to carry out the programs identified in each of the lump-sum
appropriations, and the department had discretion in choosing how to
allocate funds among those programs.
We conclude further that, for nine of the 10 grant programs that were
used to fund UPA projects, the department had authority to use
congestion pricing as a discriminating priority or priority
consideration factor to select among otherwise equally qualified grant
applicants. Each of the grant statutes underlying these 9 programs
either explicitly permitted consideration of tolling or afforded the
department discretion to consider tolling because it was rationally
related to program objectives. For 8 of these 9 grant programs, it is
clear that the department then applied congestion pricing in this way,
although in the Ferry Boat program, the department's technical
evaluation documentation initially suggested the department had
improperly supplanted statutory priorities with tolling by allegedly
awarding a $2 million grant to an urban partner that did not meet any
statutory priority criteria (but had congestion pricing) while passing
over a number of nonurban partners that met at least one priority
criterion (but lacked congestion pricing). The technical evaluation was
incorrect, however, and was not relied on by the Secretary in making
the final grant decision. The Secretary relied on corrected information
showing the urban partners in fact met statutory priorities. The
Secretary therefore was within her discretion to apply congestion
pricing as a discriminating factor.
With respect to the remaining grant program--the Transportation,
Community, and System Preservation (TCSP) program--we conclude that the
department likely did not apply statutory "priority consideration"
factors consistent with the requirements of the statute. Because
priority consideration does not entitle an applicant to grant
selection, only to a bona fide and careful review, and because the
department had discretion to use congestion pricing as a rational
discriminating priority factor, the department's action may not have
affected the outcome of its grant awards. Although not free from doubt,
we believe the statute allows the department to give priority
consideration only to cities that meet all five statutory criteria,
while the department believes an applicant must meet only one factor,
and rated applicants accordingly. Because the department used a one-
factor rating approach, it is not possible to determine from the
current record whether any of the applicants satisfied all five
criteria and thus deserved a bona fide "hard look." Given that the
department had ultimate discretion to select applicants that were not
entitled to priority consideration, we do not recommend reevaluating
the more than 500 project applications and possibly reawarding the
fiscal year 2007 TCSP grants. We note also that all TCSP grant funding
has been obligated. Instead, the department should ensure that all
future TCSP program discretionary grant awards are carried out in
accordance with the statute, that is, by giving priority consideration
only to applicants that meet all five of the factors.[Footnote 61]
Background:
The department received a number of lump-sum appropriations for fiscal
year 2006. These included:
* approximately $36 billion "for Federal-aid highways and highway
safety construction programs" administered by FHWA, see Pub. L. No. 109-
115, 119 Stat. 2396, 2402 (2005);
* $1.5 billion "[f]or payment of obligations incurred in carrying out
the provisions of 49 U.S.C. 5305, 5307 5308, 5309, 5310, 5311, 5317,
5320, 5355, 5339, and 5340 . . ." for bus and transit-related programs
administered by the Federal Transit Administration, id.,119 Stat. at
2417; and:
* approximately $5.8 million "[f]or necessary expenses of the Research
and Innovative Technology Administration. . .," id., 119 Stat. at 2423.
Although the fiscal year 2006 appropriations act itself made these sums
available for a number of programs, the accompanying conference report
contained designations--so-called "earmarks"--directing how substantial
amounts of these appropriations should be spent.[Footnote 62] For
fiscal year 2007, however, Congress enacted a $463 billion continuing
resolution, giving budget authority to federal agencies based on the
same 2006 levels, but removing the nonstatutory earmarks: "any language
specifying an earmark in a committee report or statement of managers
accompanying an appropriations Act for fiscal year 2006 shall have no
legal effect with respect to funds appropriated by this division."
Revised Continuing Appropriations Resolution, 2007, Pub. L. No. 110-5,
sec. 112 (Feb. 15, 2007).
The department interpreted this language as permitting it to allocate
the above lump sums to discretionary grant programs administered by
FHWA, the Federal Transit Administration, and the Research and
Innovative Technology Administration, in order to "fund" policy
initiatives such as the UPA initiative. April 2008 DOT Letter at 2.
Accordingly, following passage of the fiscal year 2007 continuing
resolution, the department announced in the Federal Register that it
was soliciting applications by metropolitan areas to enter into UPAs
with the department. 71 Fed. Reg. 71231 (Dec. 8, 2006). Under the UPA
initiative, cities would agree to demonstrate innovative strategies
that would reduce traffic congestion. In order to be designated as an
urban partner, applicants had to demonstrate their ability to implement
the 4Ts: tolling/congestion pricing, transit, technology (use of
cutting-edge approaches to improve system performance), and
telecommuting (expansion of telecommuting and flexible work schedules).
The urban partner designation itself would not entitle a city to any
grant funding; urban partners (as well as other cities) had to apply
and qualify for grants under the department's existing discretionary
grant programs. Designation as an urban partner, however, would entitle
a grant applicant to "preferential treatment" as the department made
its individual grant decisions. 71 Fed. Reg. at 71233-34.
The department received 26 applications for the UPA initiative and well
over 1,300 project applications from urban partner applicants and
others, for grants under various discretionary programs. After
narrowing the 26 applicants to 9 potential urban partners, the
department selected Miami, Minneapolis, New York City, San Francisco,
and Seattle as urban partners in August 2007. In the meantime, the
department solicited applications under 13 grant programs, and in
almost all instances, explained the department would give "priority
consideration" to cities selected as urban partners in deciding which
cities would be awarded such grants.[Footnote 63] As announced, the
department then gave priority consideration to these 5 urban partners
in awarding them approximately $848 million in grants for 94 different
projects under 10 discretionary grant programs administered by FHWA,
the Federal Transit Administration, and the Research and Innovative
Technology Administration. The department also awarded $18 million in
grants to preliminary urban partner San Diego under two of these
programs. All told, the department awarded approximately 98 percent of
the total $866 million in grant funding under these 9 programs to urban
partners.
Analysis:
The Department's Authority to Allocate Lump-Sum Appropriations to the
UPA Initiative:
A lump-sum appropriation is one that Congress intends to cover a number
of programs, projects, or items. By contrast, a line-item or an
earmarked appropriation refers to funds that Congress has designated
for specific and particular purposes. See GAO, Principles of Federal
Appropriations Law, Vol. II, 3d ed., GAO-06-0382SP (Washington, D.C.:
Feb. 2006), at 6-5. Agencies have considerable discretion in choosing
how to allocate lump-sum appropriations to specific programs and
activities. As the Supreme Court recognized in Lincoln v. Vigil, 508
U.S. 182 (1993), "as long as the agency allocates funds from a lump-sum
appropriation to meet permissible statutory objectives, [the
Administrative Procedure Act] gives the courts no leave to intrude."
Id. at 193. The Supreme Court in Lincoln found that the allocation of
funds from a lump-sum appropriation is an example of an administrative
decision generally committed to agency discretion, noting "the very
point of a lump-sum appropriation is to give an agency the capacity to
adapt to changing circumstances and meet its statutory
responsibilities" "in what [the agency] sees as the most effective or
desirable way." 508 U.S. at 192 (citing, among other authorities, GAO,
Principles of Federal Appropriations Law).
After the fiscal year 2007 continuing resolution removed the fiscal
year 2006 report earmarks (and even before),[Footnote 64] the
department's appropriations were available to carry out the
discretionary grant programs identified in the each of the lump-sum
appropriations. The department had broad discretion in choosing how to
allocate funds among those programs; for example, because the $1.5
billion lump-sum appropriation was available to fund various bus and
other transit-related programs under a dozen different statutes, absent
any other statutory restriction, the department could choose how much
of that appropriation to allocate to each of the dozen programs. See
Illinois Environmental Protection Agency v. United States Environmental
Protection Agency, 947 F.2d 283, 291-92 (7th Cir. 1991) (EPA could set
aside a portion of discretionary air pollution grant funds for its own
air pollution control activities; EPA appropriation for "Abatement,
Control and Compliance" was available for these activities). In
carrying out each individual grant program, the department, of course,
was required to comply with the restrictions and requirements of the
underlying grant statutes and to award funding to grantees in
accordance with the statutory provisions. We address below whether the
department complied with these underlying provisions.
The Department's Authority to Use Congestion Pricing as a Priority
Selection Factor:
As detailed in this report, the single most important factor in
determining which cities would be designated as urban partners was
whether a city had, or had committed to obtaining, authority to
implement tolling (congestion pricing). Except for nonurban partner San
Diego, the department then awarded all of the funding under the 10
programs to the five urban partners. Because congestion pricing was the
most important factor in selecting the urban partners, and because
urban partners were placed "at the head of the line" in receiving grant
awards, concerns have been raised about whether congestion pricing was
an inappropriate "superpriority" factor in making grant selections.
Whether the department had authority to use congestion pricing in this
manner depends on the specific terms of each grant statute. Duncan v.
Walker, 533 U.S. 167, 172 (2001) ("Our task is to construe what
Congress has enacted. We begin, as always, with the language of the
statute"). But before we evaluate how the department applied the terms
of each statute, it will be helpful to address the general scope of
agency discretion in making grant awards.
The scope of an administrative agency's authority to award federal
assistance funding depends on the specific terms of the authorizing
statutes. "'When Congress passes an Act empowering administrative
agencies to carry on governmental activities, the power of those
agencies is circumscribed by the authority granted.'" State Highway
Comm'n of Missouri v. Volpe, 479 F.2d 1099, 1107 (8th Cir. 1973),
quoting Stark v. Wickard, 321 U.S. 288, 309-10 (1944). In the case of
statutory earmarks and formula grants, for example, agencies have
little or no discretion in making awards. By contrast, agencies are
given considerable flexibility in making so-called discretionary
grants. See generally GAO, Principles of Federal Appropriations Law,
Vol. I, 3d ed., GAO-04-261SP (Washington, D.C.: Jan. 2004), at 3-40 to
3-52. Some discretionary grant statutes require agencies to make awards
on a competitive basis, while others do not. [Footnote 65] Agencies
have greater (but not unlimited) flexibility in making noncompetitive
grants. In such instances, it is well settled that where an agency does
not have sufficient appropriations to fund all applicants for a program
and the legislation does not establish priorities or guidance, the
agency may, within its discretion, establish selection priorities,
classifications, and/or eligibility requirements, so long as it does so
on a rational and consistent basis. Id. at 3-49 to -52. However, "in
such a case the agency must, at a minimum, let the standard be
generally known so as to assure that it is being applied consistently
and so as to avoid both the reality and appearance of arbitrary denial
of benefits to potential beneficiaries." Morton v. Ruiz, 415 U.S. 199,
231 (1974).[Footnote 66]
In cases where the authorizing statute provides discretion, agencies
are deemed to act within their authority as long as there is a rational
basis for their decisions and their acts are not "arbitrary and
capricious, an abuse of discretion, or otherwise not in accordance with
law." 5 U.S.C. § 706(2)(A); see Citizens to Preserve Overton Park, Inc.
v. Volpe, 401 U.S. 402 (1971). Under this standard, courts look to
whether the agency's decision was "based on a consideration of the
relevant factors and whether there has been a clear error in judgment."
Overton Park, 410 U.S. at 416. Although the factual inquiry is to be
"searching and careful" and there must be a "thorough, probing, in-
depth review," the ultimate standard of review "is a narrow one." Id.
at 415-16. See, e.g., City of Grand Rapids v. Richardson, 429 F. Supp.
1087, 1094-95 (W.D. Mich. 1977) (denying request to halt grant awards
based on allegations of vague and unpublicized eligibility criteria;
while court was "tremendously sympathetic" to the losing applicant,
"the Court cannot say that the agency committed error, abused its
discretion or acted arbitrarily or capriciously within the meaning of
...Overton Park," nor did agency violate "elementary fairness").
One other introductory point is relevant before reviewing the
department's use of congestion pricing in awarding grants under the 9
programs. As a general rule, section 301 of Title 23 of the U.S. Code
prohibits the imposition of tolls on all roads, highways, bridges,
tunnels, and other transportation facilities constructed with federal
funds.[Footnote 67] Thus in our view, the department could not use any
form of tolling, such as congestion pricing, as a selection factor for
a grant--whether made under Title 23 (FHWA and Research and Innovative
Technology Administration grants) or Title 49 (Federal Transit
Administration grants)--if the tolling that was the basis of the
grant's "priority" was prohibited by section 301. Congress has enacted
a number of exceptions to the tolling ban, however,[Footnote 68] and
the department has confirmed that all of the tolling, specifically
congestion pricing, activity supporting the grants at issue qualified
under one or more of these exceptions. October 2008 DOT Letter at 15-
16.
Bus and Bus Facilities Program:
Using congestion pricing as a priority selection factor, the department
awarded grants under the Bus and Bus-Related Facilities Capital
Investment Grants (Bus and Bus Facilities) program to all five urban
partners--New York City, San Francisco, Minneapolis, Seattle, and
Miami--and to San Diego, which was not designated as an urban partner.
The total funding was $433 million, the single largest amount allocated
to the 10 programs at issue and fully half of the $866 million awarded
under all of these programs. Under the Bus and Bus Facilities program,
the department "may make grants ...to assist State and local
governmental authorities in financing capital projects to replace,
rehabilitate and purchase buses and related equipment and to construct
bus-related facilities ...." 49 U.S.C. § 5309(b)(3). The only explicit
direction in the statute concerning the selection of grantees is that
the department "shall consider the age and condition of buses, bus
fleets, related equipment, and bus-related facilities." 49 U.S.C. §
5309(m)(8) (emphasis added). The department is required only to
"consider" this factor, however, not to give it priority.
The statute also authorizes the department to make bus grants subject
to "terms, conditions, requirements, and provisions that the Secretary
determines to be necessary or appropriate for the purposes of this
section." 49 U.S.C. § 5309(c)(3) (emphasis added). In the department's
view, this provision, combined with the absence of mandatory selection
criteria, underscored its "broad discretion" to use congestion pricing
as a selection factor, because the statute leaves to the department's
judgment what conditions are "necessary" or "appropriate" to achieve
"the purposes of this section." April 2008 DOT Letter at 7. Requiring
congestion pricing as a selection factor for bus grants was "necessary"
or at least "appropriate," in the department's judgment, because
motorists who are priced off the roads by congestion pricing will need
greater mass transit options. Requiring congestion pricing also was
consistent, in the department's judgment, with the general policies,
findings, and purposes of the public transportation statute, such as
development of "improved public transportation ...techniques," 49
U.S.C. § 5301(f), which the department believes would include an
integrated congestion management system of which congestion pricing is
a component. As the department also notes, Congress has found that:
"the welfare and vitality of urban areas, the satisfactory movement of
people and goods within those areas, and the effectiveness of programs
aided by the United States Government are jeopardized by deteriorating
or inadequate urban transportation service and facilities, the
intensification of traffic congestion, and the lack of coordinated,
comprehensive, and continuing development planning ....,"
Id. § 5301(b)(2) (emphasis added). Congress therefore has declared
that:
"it is in the interest of the United States ...to foster the
development and revitalization of public transportation systems that--
(1) maximize the ...efficient mobility of individuals; (2) minimize
environmental impacts; and (3) minimize transportation-related fuel
consumption...."
Id. § 5301(a) (emphasis added); see October 2008 DOT Letter at 7. The
department's judgment is that congestion pricing supports all three of
these goals, and that one of these, mobility, will enhance the
effectiveness of the bus transportation system. [Footnote 69]
We conclude that the department acted within its discretion in using
congestion pricing as a priority selection factor for the fiscal year
2007 Bus program grants. Courts have found that language very similar
to that in the Bus program statute provides agencies with broad
discretion in awarding grants so long as the agency complies with any
specific statutory directives. The court in Pullman Inc. v. Volpe, 337
F. Supp. 432 (E.D. Pa. 1971), for example, addressed the predecessor
statute to the precise Bus program provision at issue here.[Footnote
70] The court held that the provision, authorizing the department to
include in public transit capital investment grants "such terms and
conditions as [the Secretary] may prescribe," see 337 F. Supp. at 438,
provided broad discretion to fulfill broad congressional purposes such
as to "encourage the planning and establishment of areawide urban mass
transportation systems needed for economical and desirable urban
development, with the cooperation of mass transportation companies both
public and private ...." See Pub. L. No. 88-365, sec. 2(b)(2), 78 Stat.
302, 303 (July 9, 1964). The court found that while the department did
not have complete discretion--in selecting grantees, for example, it
had to make a number of statutory findings--the "such terms and
conditions" provision authorized the department to:
"determine the procedure to be applied and the grants to be made.
Within those limitations the statute is permissive, provides only the
broadest conceptual guidelines for action, and requires highly
developed expertise in the determination of the conditions under which
the grant of assistance will fulfill the broad congressional purposes."
Id. at 438. Pullman therefore upheld as within the department's broad
discretion a grant condition requiring the local applicant to use
competitive bidding for any subcontracts and to determine bid
responsiveness. The court found this requirement "consistent with the
statute's encouragement of local responsibility in urban mass
transportation" and thus an appropriate exercise of the department's
discretion. Id.
Like the department's grant condition in Pullman, the department's
congestion pricing grant condition here is consistent with the
overarching objectives of the Bus statute--to provide a public
transportation system that maximizes mobility and minimizes
environmental impacts and transportation-related fuel consumption.
While the Pullman statute arguably afforded even greater discretion (it
allowed the department to impose "such terms and conditions as [the
Secretary] may prescribe," while the current statute authorizes the
department to set "terms [and] conditions . . . that the Secretary
determines to be necessary or appropriate for the purposes of this
section"), and while congestion pricing may not be strictly "necessary"
for 49 U.S.C. § 5309(c)(3) purposes to achieve the objectives of the
bus statute--a well-functioning bus system does not "need" congestion
pricing; congestion pricing "need"s a well-functioning bus system--we
agree with the department that congestion pricing is at least
"appropriate" to achieve the larger statutory purposes. See Town of
Secaucus v. DOT, 889 F. Supp. 779, 789 (D.N.J. 1995) (upholding grant
award for construction of strengthened foundation underlying mixed
public transportation hub/commercial development because project would
"enhance the effectiveness of a mass transportation project"); B-
160204, Dec. 7, 1966 (GAO approval of grants to purchase city buses
used occasionally for charter service in off-peak hours, because buses
were needed for "an efficient and coordinated mass transportation
system"); see generally State Highway Comm'n of Missouri v. Volpe,
above, 479 F.2d at 1112 (a statute "should be construed according to
its subject matter and the purpose for which it was enacted."). Other
grant statutes with similarly broad language have been found to provide
broad agency discretion. See, e.g., Illinois Environmental EPA v.
USEPA, above, 947 F.2d at 291 (authority to make grants "upon such
terms and conditions ...necessary to carry out the purpose" of Clean
Air Act provision should be read broadly; grant statute's purpose was
to implement air quality standards within states); LEAA, above, 605
F.2d 21, 22, 27 (1st Cir. 1979) (authority to make grants "according to
the criteria and on the terms and conditions the Administration
determines consistent with this chapter" provided "large discretion").
Ferry Boat Program:
Using congestion pricing as a priority selection factor, the department
awarded grants totaling $40.2 million under the Ferry Boat grant
program to urban partners New York City, San Francisco, and Seattle.
The department is authorized to award grants under this program for
construction of ferry boats and ferry terminal facilities in accordance
with eligibility criteria in 23 U.S.C. § 129(c), see 23 U.S.C. §
147(a), and priority selection criteria in 23 U.S.C. § 147(c).
Regarding the latter, the statute requires the department to give
priority in the allocation of funds:
"to those ferry systems, and public entities responsible for developing
ferries, that--(1) provide critical access to areas not well-served by
other modes of surface transportation; (2) carry the greatest number of
passengers and vehicles; or (3) carry the greatest number of passengers
in passenger-only service."
23 U.S.C. § 147(c).
Although congestion pricing is not explicitly identified as a priority
selection factor, the department believes it had discretion to apply
congestion pricing as a discriminating or "tie-breaking" factor to
select among otherwise equally qualified applicants, because congestion
pricing is rationally related to the purposes of the Ferry Boat
program. April 2008 DOT Letter at 6, 9. The department reasons that
Congress's decision to give priority to ferry systems that carry the
greatest number of passengers and vehicles reflects congressional
support for increasing mobility and reducing congestion. Id. at 6, note
1; see also id. at 8-9 (tolling and congestion pricing are consistent
with the department's core mission focusing on "mobility, safety,
efficiency, convenience, and economic growth."); October 2008 DOT
Letter at 9 (congestion pricing will shift passengers from cars to
ferries, maximizing "social yield" on the federal government's
investment). The department therefore used congestion pricing to select
among applicants qualifying under one or more of the statutory
priorities.
We agree that the department had discretion to use congestion pricing
as a discriminating factor among equally qualified applicants based on
the rational connection between congestion pricing, mobility, and
congestion. However, the department did not have authority to override
the statute by, for example, rejecting applicants that lacked
congestion pricing but met one or more statutory priorities in favor of
urban partners that had congestion pricing but met no statutory
priorities. The department's initial technical evaluation documentation
for the fiscal year 2007 Ferry Boat grant awards suggested
(incorrectly) that this occurred for one grant, Seattle's grant for the
High-Speed, Ultra-Low Wake Passenger-Only Ferry project. According to
the evaluation documentation, that project application "does not meet
statutory priority selection criteria under 23 U.S.C. 147(c) of serving
large number of passengers and vehicles, or large number of passengers
in passenger-only service." (Emphasis added.) The department's
technical evaluator rated the application as "qualified" rather than
"highly qualified," in part because it did not "meet statutory
preference criteria." The department nevertheless awarded a $2 million
grant for this project based on Seattle's urban partner status, passing
over applications for at least 23 other projects from other
jurisdictions that the department's technical evaluator determined met
one or more of the statutory priorities.[Footnote 71]
The initial technical evaluation was incorrect, however. As noted, the
statute requires priority for "ferry systems, and public entities
responsible for developing ferries"--not for individual projects--that
carry the greatest number of passengers and vehicles, and the ferry
system in Seattle carries the greatest number of passengers of all
ferry systems in the country (emphasis added).[Footnote 72] Thus all of
the projects proposed by Seattle should have been rated as meeting at
least one of the statutory priority criteria. October 2008 DOT Letter
at 9-10. Yet the department evaluator apparently focused (incorrectly)
on whether an individual project would carry the greatest number of
passengers. October 2008 DOT Letter at 9.[Footnote 73]
Equally important, the department told us that the Secretary did not
rely on (or see) the technical evaluation forms for the Seattle High-
Speed project (or any other project funded under the UPA initiative),
but instead relied on other department officials' determinations that
the recommended grants "comply or would comply with the statutory
requirements of the FBD [Ferry Boat Discretionary] program," October
2008 DOT Letter at 10, which would have included the statutory
priorities. Accordingly, despite the technical reviewer's error, the
Secretary was within her discretion to apply congestion pricing as a
discriminating factor and to select Seattle's High-Speed project for
funding. See Mass. Dep't of Correction v. Law Enforcement Assistance
Administration, 605 F.2d 21, 24-25 (1st Cir. 1979) (LEAA) (upholding
grant decision despite errors in technical evaluation process;
"whatever was the case at the panel review level, LEAA's final decision
did not rely on the discredited factors. It relied exclusively on
[permissible factors] ...We do not believe these beginning errors
sufficiently infected the entire process ...to warrant setting aside a
decision entrusted to LEAA's discretion.").
Transportation, Community, and System Preservation Program:
Using congestion pricing as a priority selection factor, the department
awarded grants under the TCSP program totaling $50.4 million for
projects by urban partners Minneapolis, San Francisco, and Seattle.
Under the TCSP statute, enacted in 1998 as a "smart growth" initiative,
the department may award grants and other assistance to support local
strategies that integrate transportation projects with community and
system preservation "livability" plans and practices. The statute
specifies broad eligibility criteria: grants may be awarded for any
project under the federal-aid highway, bus, or transit-related programs
or for "any other activity relating to transportation, community, and
system preservation that the Secretary determines to be appropriate."
Pub. L. No. 109-59, sec. 1117(d), 23 U.S.C. §101 note (Aug. 10, 2005).
[Footnote 74]
The statute also requires the department to give "priority
consideration" to applicants that meet specified criteria. See id. sec.
1117(e) (emphasis added). "Priority consideration" is not a defined
term; Congress added it in 2005 when it converted TCSP from a pilot
program to a permanent program. As originally enacted in 1998, the
statute required the department to give selection "priority" to
applicants meeting specified criteria.[Footnote 75] Thus, as under the
Ferry Boat statute discussed above, the department did not have
discretion under the TCSP pilot program to pass over applicants that
met the "priority" criteria in favor of those that did not. In 2005,
however, Congress added the word "consideration" after
"priority."[Footnote 76] The legislative history is silent on the
reason for this change, but Congress must be presumed to have intended
a meaning different from "priority," as well as from mere
"consideration," which it used in the Bus statute as discussed above.
Reiter v. Sonotone Corp., 442 U.S. 330, 339 (1979) (in construing a
statute, courts must give effect, if possible, to every word Congress
used). Thus at least in the context of grant selection criteria, it is
possible Congress intended a sort of hierarchy--consideration, priority
consideration, and priority--with priority requiring the greatest
adherence to named criteria.
Relying on dictionary definitions of "priority" and "consideration,"
since the terms are not defined in the statute, the department believes
that "priority consideration" does not require the department to award
funds to applicants that meet the criteria but "means only that the
Secretary shall give the applicants that meet one or more of the
criteria in section 1117(e) precedential or careful deliberation or
thought before competing alternatives...." October 2008 DOT Letter at
13 (emphasis added).
We agree that the department likely is not required to select "priority
consideration" candidates, because this was the meaning of "priority"
before the statute was amended. But the department's reading, as we
understand it, is too narrow. The department appears to argue that it
must simply give "careful deliberation" first to applicants that meet
the criteria, then to "competing alternatives" applicants that do not
meet the criteria, without giving substantive weight to the criteria
themselves in selecting grant recipients. This process-oriented
interpretation does not account for the fact that "priority" and
"priority consideration" both appear in selection "criteria" provisions
(see notes 16-17 above), not in selection process provisions. While a
process-oriented interpretation has been recognized in a number of
court decisions, it is used there as a specialized term--"a term of art
in the jargon of federal employment law." Pope v. FCC, 311 F.3d 1379,
1381 (Fed. Cir. 2002).[Footnote 77] Moreover, when the department
analyzed the 1998 and 2005 statutes more contemporaneously, it read
both "priority" and "priority consideration" as pertaining to selection
criteria, not selection sequence,[Footnote 78] and indeed, according to
the department, this was how the fiscal year 2007 evaluations for TCSP
grants were performed. The department reviewers considered whether
applicants met priority consideration and other factors. Final
selections were made applying congestion pricing as a discriminating
factor.
In our view, the fact that Congress changed "priority" to "priority
consideration" means the department was not bound to select applicants
that met the "priority consideration" factors. Because Congress
retained the phrase in the selection "criteria" provision, we also
believe it relates to more than simply the timing of an applicant's
consideration. Congress singled out a class of candidates and mandated
that the department give them special attention and a careful and bona
fide review. Ultimately, however, the department had discretion to
select applicants that were not in the "priority consideration" class,
or to select among multiple applicants that were all in the class,
based on other factors rationally connected to the objectives of the
statute. Congestion pricing was a factor rationally related to the TCSP
statute, in the department's judgment, because the stated purpose of
the statute is to support development and implementation of strategies
to integrate transportation and community plans for addressing, among
other things, improving the efficiency of the nation's transportation
system--which congestion pricing would help to achieve. October 2008
DOT Letter at 10-11; see Pub. L. No. 109-59, § 1117(b)(1). We agree
that the department could use congestion pricing as a discriminating
factor in selecting among otherwise qualified applicants.
The remaining issue is whether, before the department applied
congestion pricing as a discriminating factor, it followed the statute
and gave applicants that qualified for priority consideration (if any)
the bona fide "hard look" that Congress required. The answer to this is
not straightforward. Department officials told us they treated
applications as qualifying for priority consideration if a candidate
met just one of the five statutory criteria, and looked no further. As
discussed below, we believe the better view is that the statute
requires all five to be met. Because of the department's one-factor
approach, however, it is not possible to determine from the current
record whether any of the applicants met all five factors. Even if no
urban partner had satisfied all five criteria but some other applicants
had done so, the outcome might not have changed. Because the department
had discretion, once it gave bona fide consideration to priority
consideration applicants, to make selections based on congestion
pricing, its announced key factor, it could well be that the same urban
partners would have been selected. It is also possible that having
taken a hard look at "true" priority consideration candidates, the
department would have selected applicants that were not urban partners
instead. Given that the department had ultimate discretion to select
nonpriority-consideration applicants, and that all TCSP grant funding
has been obligated, we do not recommend re-evaluating the more than 500
project applications and possibly reawarding the fiscal year 2007 TCSP
grants. Instead, the department should ensure that all future TCSP
discretionary grant awards are carried out in accordance with the
statute, that is, by giving priority consideration only to applicants
that meet all five of the factors, for the reasons we now address.
Literally read, the statute requires that an applicant satisfy all five
factors in order to qualify for priority consideration. The statute
lists five factors, with the last two joined by the word "and."
[Footnote 79] The usual meaning of the word "and" is conjunctive--"and"
means "and"--unless the context dictates otherwise. The presumption is
that "and" is used in its ordinary sense. See, e.g., Reese Brothers v.
United States, 447 F.3d 229 (3d Cir. 2006); Zorich v. Long Beach Fire
Dep't and Ambulance Serv., 118 F.3d 682, 684 (9th Cir. 1997). Overall,
we believe the TCSP program's context does not dictate otherwise.
Several of the five factors have subparts, providing different ways in
which an applicant can satisfy that factor, and these are separated by
the word "or" rather than "and." This shows that when Congress intended
to provide alternatives, it did so. On the other hand, the five factors
appear to overlap to some extent, for example in referring to
environmental protection, arguably indicating that just one factor must
be met. At least initially, however, environmental protection was one
of the key aims of the TCSP program,[Footnote 80] and thus requiring
that it be addressed in more than one area may be warranted. In
addition, the second factor refers to applicants that "have other
policies to integrate transportation, community, and system
preservation practices," arguably indicating this was intended as an
alternative. In context, however, we read this as simply a way to
describe one in a list of five factors requiring an applicant to have
different types of plans, policies, and programs, to be expected in a
grant program focusing on planning rather than on construction.
The department states that because the five criteria are "stated in a
wide-sweeping manner" and because of the "broad context of the entire
TCSP statute" "with its inclusive purposes, wide eligibility
requirements, and extensive criteria for priority consideration...it
was logical to conclude that the applicants did not have to meet all
five of the criteria ...." October 2008 DOT Letter at 12-13. We believe
these factors show the opposite. Given the extraordinary breadth of the
eligibility requirements, it is logical that Congress would provide
criteria for narrowing the pool, by specifying which applicants deserve
special consideration. Only having to meet one of the criteria would
undercut the very concept of "priority," because virtually all
applicants could satisfy one of these broad requirements.[Footnote 81]
The provision's legislative history also supports the interpretation
that all factors must be met. As noted, when Congress made the TCSP
program permanent in 2005, it amended what were then two "priority"
criteria provisions (one for planning grants, another for
implementation grants). It combined them into a single provision and
changed the requirement from the department having to give "priority"
to having to give only "priority consideration." At the same time,
Congress amended the "purposes" provision from a list of five purposes
joined by the word "and" to a list of roughly the same five purposes
introduced by the term "one or more of the following." See Pub. L. No.
105-178, sec. 1221(c)(2) (1998 statute), Pub. L. No. 109-59, sec.
1117(b) (2005 statute). Despite all of these changes, Congress retained
the "and" in the list of priority consideration factors. This suggests
that "and" was intentional, not a drafting oversight. The fact that
Congress was amending the statute to require only priority
consideration rather than priority also supports this reading--once the
department had this additional selection discretion, it would make the
provision be virtually meaningless if only one of the five factors had
to be met.
The overall purpose of the program and the department's historic
descriptions of it also support the reading that all five factors must
be met. The TCSP program was established as a counterpoint to
traditional transportation grant programs that focus on new
construction as a way to improve mobility, without necessarily
considering the effect on surrounding communities and the environment.
The TCSP program was intended to encourage communities to think more
strategically and to integrate their transportation planning with
community and regional economic planning. As the department has noted
on many occasions, the TCSP program is intended to address the
relationships among transportation, community, and system preservation
plans and practices--the so-called land use/transportation
link[Footnote 82]--and to encourage the "use [of] transportation to
build livable communities."[Footnote 83] Giving priority to applicants
that meet all five factors supports this purpose by rewarding those
that integrate the greatest number of activities. The department itself
has recognized this focus on integration in numerous descriptions of
the TCSP program, literally underlining the "and" between the final two
priority factors and emphasizing that it will give priority to
applicants that meet all five program purposes (which roughly mirrored
the priority factors).[Footnote 84]
Finally, the conjunctive "and" should be interpreted as a disjunctive
"or" only to avoid an incoherent reading of the statute or a reading
that leads to an irrational result. Sosa v. Chase Manhattan Mortgage
Corp., 348 F.3d 979, 983 (11th Cir. 2003); OfficeMax v. United States,
428 F.3d 583, 589 (6th Cir. 2005). Reading these factors as conjunctive
would not lead to such a result, however, because an applicant can meet
all five factors. The department demonstrated this in recent
discussions by outlining how it believes the TCSP projects funded for
Seattle, Minneapolis, and San Francisco could have met all of the five
factors.
Value Pricing Pilot Program:
Using congestion pricing as a priority selection factor, the department
awarded grants totaling $20 million under the Value Pricing Pilot
program to urban partners Minneapolis, New York, San Francisco, and
Seattle. Under this program, the department is authorized to fund
cooperative agreements with up to 15 state and local governments to
"establish, maintain and monitor value pricing programs," Pub. L. No.
109-59, sec. 1604, 23 U.S.C. § 149 note, and Value Pricing Pilot
projects may include tolling and other forms of congestion pricing on
federally funded highways.
We conclude that the department had authority to use congestion pricing
as a priority selection factor. Because the very purpose of the program
is to fund congestion pricing and tolling pilot projects, congestion
pricing clearly was a permissible selection factor.
Intelligent Transportation System-Operational Testing to Mitigate
Congestion Program:
Using congestion pricing as a priority selection factor, the department
awarded grants under the Intelligent Transportation System-Operational
Testing to Mitigate Congestion (ITS-OTMC) program totaling $89 million
to urban partners New York City, Seattle, Minneapolis, and San
Francisco, and $3 million to San Diego, which is not an urban partner.
Under this program, the department is authorized to fund grants to
cities to carry out comprehensive programs of intelligent
transportation system research, development, and operational testing.
See Pub. L. No. 109-59, §§ 5201, 5306 (Aug. 10, 2005), 23 U.S.C. § 512
note. The grant statute requires the department to give "higher
priority" to funding program projects that, among other things:
"(1) enhance mobility and productivity through improved traffic
management ... [and] toll collection ...; (2) utilize interdisciplinary
approaches to develop traffic management strategies and tools to
address multiple impacts of congestion concurrently; [and] ... (3)
address traffic management ... [or] toll collection traveler
information with goals of ... reducing metropolitan congestion by not
less than 5 percent by 2010 ...."
Pub. L. No. 109-59, sec. 5306(b) (emphasis added).
Because the statute specifically requires the department to give higher
priority to projects that enhance mobility through toll collection, and
focuses on reducing congestion--a goal that the department's expert
judgment, is facilitated and enhanced by congestion pricing--the
department was clearly authorized to use congestion pricing as a
priority selection factor in awarding these grants.
New Fixed Guideway Facilities Program (Very Small Starts):
Using congestion pricing as a priority selection factor, the department
awarded a total of $112.7 million in grants to urban partner New York
City under the New Fixed Guideway Facilities (New Starts)
program.[Footnote 85] The funding consisted of a series of individual
grants, each for less than $25 million, thus qualifying as Very Small
Starts grants. October 2008 DOT Letter at 4-5.
Under the general New Starts program, the department may award grants
"only if the Secretary, based on evaluations and considerations set
forth in paragraph (3), determines that the project is [among other
things] ...justified based on a comprehensive review of its mobility
improvements, environmental benefits, [and] cost effectiveness," see 49
U.S.C. § 5309(d)(2)(B). In making this determination, the department
must evaluate, among other things, "(i) congestion relief; (ii)
improved mobility; (iii) air pollution; (iv) noise pollution; [and] (v)
energy consumption," see 49 U.S.C. § 5309(d)(3)(D), as well as "other
factors that the Secretary determines to be appropriate to carry out
this subsection," 49 U.S.C. § 5309(d)(3)(K). The department has
identified these "other factors" as including congestion management/
pricing strategies. See 72 Fed. Reg. 17981, 17982 (Apr. 10, 2007); 72
Fed. Reg. 30907, 30913 (June 4, 2007).
By contrast, grants made under the Very Small Starts program--a subset
of the New Starts program--are not currently subject to these or any
other specific selection criteria.[Footnote 86] The department
therefore had discretion to use selection criteria rationally connected
to achieving the purposes of the statute. The department states that it
looked to the above New Starts selection criteria for guidance in
exercising this discretion, October 2008 DOT Letter at 5, and in the
department's judgment, congestion-pricing measures meet several of the
New Starts selection factors. Congestion pricing reduces congestion by
creating a price incentive for motorists to keep off the roads in the
most congested times of day and to use public transit alternatives.
Less congestion, in turn, improves mobility, reduces environmental
pollution, and reduces fuel consumption. October 2008 DOT Letter at 5;
see also Department of Transportation, Fight Gridlock Now, available at
[hyperlink, http://www.etc.dot.gov] (accessed Nov. 14, 2008).
We conclude that the department had authority to use congestion pricing
as a priority factor in making these Very Small Starts grants. Based on
the department's technical expertise in traffic management, we give
deference to the department's position that congestion pricing supports
and enhances the achievement of several of the selection factors for
this program--reduced congestion, increased mobility, and reduced
pollution.
Innovative Bridge Research and Deployment Program:
Using congestion pricing as a priority selection factor, the department
awarded grants totaling $5.1 million under the Innovative Bridge
Research and Deployment program to urban partner Seattle. Under this
program, the department is authorized to award grants to "promote,
demonstrate, evaluate, and document the application of innovative
designs, materials, and construction methods in the construction,
repair, and rehabilitation of bridges and other highway structures." 23
U.S.C. § 503(b)(1). The department is required to "select and approve"
grants for this program "based on whether the project ...meets the
goals of the program described in paragraph (2)." Id. § 503(b)(3)(B).
Paragraph (2) provides a nonexclusive list of the program's goals; it
states that "[t]he goals of the program shall include" eight different
objectives, id. § 503(b)(2), none of which is to reduce congestion or
increase the use of congestion pricing. Although congestion pricing is
not explicitly identified as a selection factor, the statute affords
the department discretion to use congestion pricing as a selection
factor provided congestion pricing is rationally related to the
program's objectives. The statute's use of the term "include" indicates
that the list of goals was nonexclusive. Puerto Rico Maritime Shipping
Authority v. I.C.C., 645 F.2d 1102, 1112 (D.C. Cir.1981); Adams v.
Dole, 927 F.2d 771, 776 (4th Cir. 1991). The department suggests that
the statutory objective in 23 U.S.C. § 503(b)(2)(B) to reduce "traffic
congestion" supports the use of congestion pricing, see April 2008
Letter at 6, October 2008 Letter at 14, although this objective only
pertains to congestion during bridge construction. In our view, an even
stronger nexus is that congestion pricing would help achieve some of
the policies of the national transportation system reflected in the
federal aid highway program: "(i) national and interregional personal
mobility (including personal mobility in rural and urban areas) and
reduced congestion; [and] (ii) flow of interstate ...commerce and
freight transportation ...." Id. § 101(b)(3)(C).
Interstate Maintenance Discretionary Program:
Using congestion pricing as a priority selection factor, the department
awarded grants totaling $50 million under the Interstate Maintenance
Discretionary grant program to urban partners Miami and Minneapolis.
Under this program, federal set-aside funds are available "for
resurfacing, restoring, rehabilitating, and reconstructing any route or
portion thereof on the Interstate System ...and any toll road on the
Interstate System" not subject to certain agreements. 23 U.S.C. §
118(c)(1). The statute requires "priority consideration" of applicants
proposing maintenance on high-cost (above $10 million), high-volume
(urban high-volume, or rural high-truck-volume) routes. 23 U.S.C. §
118(c)(3).
Although congestion pricing is not an explicit priority selection
factor, we conclude that the department had discretion to use it to
discriminate among otherwise equally qualified applicants. Miami
qualified for statutory priority consideration because it proposed a
high-cost project on a high-volume route. Although Minneapolis may not
have qualified for priority consideration (its grant was only for $6.6
million), as discussed above under the TCSP program; nonetheless, the
department could select Minneapolis based on congestion pricing if
there was a rational nexus between congestion pricing and the
Interstate Maintenance Discretionary program's objectives or the
general federal aid highway objectives. As noted in discussing the
Bridge program, this nexus exists with the federal aid highway goals of
mobility and reduced congestion; the Bridge program priority for high-
volume and urban routes also reflects a mobility focus that would be
enhanced by congestion pricing. See April 2008 DOT Letter at 6. We
therefore conclude the department had discretion to use congestion
pricing as a factor.
Public Lands Highway Discretionary Program:
Using congestion pricing as a priority selection factor, the department
awarded a $47.3 million grant under the Public Lands Highway
Discretionary program to urban partner San Francisco. Under this
program, which improves access to and within public lands, the
department must allocate a portion of annual authorized funding on the
basis of state need "as determined by the Secretary," and in making
this allocation, the Secretary is required to "give preference" to
projects that are "significantly impacted by Federal land" and
"resource management activities that are proposed by a State that
contains at least 3 percent of the total public land in the United
States." 23 U.S.C. § 202(b)(1)(A), (B) (emphasis added). San Francisco
met these preference criteria because California has at least 3 percent
of U.S. public lands and San Francisco's proposed grant project (either
on the Golden Gate Bridge or Doyle Drive) was deemed "significantly
impacted" based on location, traffic volumes, and access to the public
land. According to a department official, the department then applied
congestion pricing to select San Francisco from among the "preferred"
applicants.[Footnote 87]
There is no explicit basis in the Public Lands grant statute to use
congestion pricing as a discriminating factor, and the department
acknowledges that there is not a specific congestion-reduction or
mobility component "associated with" the Public Lands program. April
2008 DOT Letter at 6. Nonetheless, there was a rational nexus between
congestion pricing and program objectives. As the department notes,
congestion pricing will provide California with additional funds,
"thereby leveraging the federal investment," and congestion pricing "is
reasonably expected to reduce emissions." April 2008 DOT Letter at 6;
October 2008 DOT Letter at 3-4. Furthermore, as with the other federal-
aid highway program grants discussed above, congestion pricing supports
the general program goals of mobility and reduced congestion. Thus we
believe the department had discretion to use congestion pricing as a
factor in awarding this grant.
[End of section]
Appendix VI: GAO Contacts and Staff Acknowledgments:
Katherine Siggerud (202) 512-2834 or siggerudk@gao.gov Susan Sawtelle
(202) 512-6417 or sawtelles@gao.gov:
Staff Acknowledgments:
In addition to the contacts named above, Richard Burkard, David Hooper,
Emily Larson, James Ratzenberger, Aron Szapiro, Donald Watson, Crystal
Wesco, Carrie Wilks, and Courtney Williams made key contributions to
this report.
[End of section]
Footnotes:
[1] U.S. Department of Transportation, National Strategy to Reduce
Congestion on America's Transportation Network (Washington, D.C., May
2006).
[2] GAO, Transportation Programs: Challenges Facing the Department of
Transportation and Congress, [hyperlink,
http://www.gao.gov/products/GAO-09-435T] (Washington, D.C.: Mar. 10,
2009). For example, according to the department, highway spending by
all levels of government has increased 100 percent in real dollar terms
since 1980, but the hours of delay during peak travel periods have
increased by almost 200 percent during the same period.
[3] U.S. Department of Transportation, Refocus. Reform. Renew. A New
Transportation Approach for America (Washington, D.C., July 2008).
[4] Congestion pricing is a tolling strategy that often entails
charging drivers a fee that varies with traffic volumes or by time of
day according to a published schedule to help shift some rush-hour
traffic to off-peak times. According to the department, it was not
looking for proposals that simply tolled roads (i.e., would charge a
flat fee) to generate revenue but was instead seeking proposals that
would provide congestion relief. The department also considers
congestion parking, which charges drivers a fee to park that varies
with traffic volumes or by time of day, as a form of congestion
pricing.
[5] According to the Federal Highway Administration, public-private
partnerships involve a greater private role in planning, financing,
designing, constructing, operating, and maintaining a transportation
facility compared to traditional procurement methods.
[6] See, for example, [hyperlink,
http://www.gao.gov/products/GAO-09-435T] and 21ST Century Challenges:
Reexamining the Base of the Federal Government, [hyperlink,
http://www.gao.gov/products/GAO-05-325SP] (Washington, D.C.: Feb. 1,
2005).
[7] See GAO, Highway Public-Private Partnerships: More Rigorous Up-
front Analysis Could Better Secure Potential Benefits and Protect the
Public Interest, [hyperlink, http://www.gao.gov/products/GAO-08-44]
(Washington, D.C.: Feb. 8, 2008).
[8] Pub. L. No. 105-5, 121 Stat. 8 (Feb. 15, 2007). In previous years,
Congress provided the department with specific instructions on which
cities and states should receive funds for a number of the department's
programs. For example, according to the department's Office of
Inspector General, there were about 8,000 funding directives in fiscal
year 2006, nearly all for highway and transit programs. See U.S.
Department of Transportation, Office of Inspector General, Review of
Congressional Earmarks Within Department of Transportation Programs
(Washington, D.C., Sept. 7, 2007).
[9] In this report, we refer to metropolitan areas as cities, since
cities generally took the lead with UPA applications.
[10] Chicago did not meet its December 2008 deadline for obtaining the
legal authority necessary to implement congestion pricing. As a result,
in accordance with the terms of the department's Congestion Reduction
Demonstration Agreement with Chicago, the department cancelled
Chicago's agreement.
[11] As we have reported, the department's operating administrations
are organized by mode--reflecting the structure of funding programs--
resulting in an organizational structure that can impede collaboration
between modes and limit the department's ability to plan, fund, and
construct intermodal projects. See GAO, Intermodal Transportation: DOT
Could Take Further Actions to Address Intermodal Barriers, GAO-07-718
(Washington, D.C.: June 20, 2007).
[12] The 14 applicants included the 5 cities that the department
designated as urban partners, the 4 other cities that were
semifinalists but were not selected as urban partners, and 5 other
unsuccessful applicants.
[13] See the background section of this report for a description of
these programs.
[14] 71 Fed. Reg. 71231 (Dec. 8, 2006).
[15] As we have reported, congestion pricing can potentially enhance
mobility by reducing congestion and the demand for roads. See GAO,
Highway Finance: States' Expanding Use of Tolling Illustrates Diverse
Challenges and Strategies, [hyperlink,
http://www.gao.gov/products/GAO-06-554] (Washington, D.C.: June 28,
2006).
[16] According to the department, it selected Washington, D.C., as a
national workshop site because it was a low-cost location to test the
workshop. It selected Atlanta and Denver because they are major
transportation hubs that are accessible to many travelers.
[17] A Webinar is a workshop transmitted over the World Wide Web.
[18] Department of Transportation, National Strategy to Reduce
Congestion, Urban Partnerships, [hyperlink,
http://www.fightgridlocknow.gov] (last visited Jan. 7, 2009).
[19] The UPA technical review team included staff from the Federal
Transit Administration, the Federal Highway Administration, and the
Research and Innovative Technology Administration.
[20] The nine preliminary urban partners were Atlanta, Dallas, Denver,
Miami, Minneapolis, New York City, San Diego, San Francisco, and
Seattle.
[21] San Diego's transit project would install vehicle assist and
automation system technologies on buses. Vehicle assist technologies
help the driver maintain lateral control of the bus. Vehicle automation
technologies provide both longitudinal and lateral control of the
transit vehicle's movement.
[22] In August 2008, San Francisco modified its proposal to meet the
congestion-reduction goals of the department. San Francisco will not
variably price Doyle Drive or the Golden Gate Bridge, as originally
proposed; it will variably price on-street and off-street parking in
downtown San Francisco. As a result, San Francisco is receiving about
$72 million less than originally awarded.
[23] New York City was allowed to retain $2 million from the
Alternatives Analysis Program because the 4Ts were not considered in
making the award, and $1.6 million from the Value Pricing Pilot Program
to help cover project planning and development costs.
[24] In April 2008, the department allocated Chicago and Los Angeles
$153 million and $211 million, respectively. For this report, we
reviewed urban partners selected in fiscal year 2007; therefore, we did
not review the department's actions related to Chicago and Los Angeles.
[25] 72 Fed. Reg. 63951 (Nov. 13, 2007). According to the department,
it received and reviewed 35 applications. Of these 35, Los Angeles;
Chicago; Atlanta; Denver; Dallas; Santa Clara County, California; and
Salt Lake City, Utah previously submitted applications for the UPA
initiative.
[26] U.S. Department of Transportation, Refocus. Reform. Renew. (July
2008).
[27] 68 Fed. Reg. 37370 (June 23, 2003) Office of Federal Financial
Management Policy Directive on Financial Assistance Program
Announcements. The department has described the weights of criteria in
other areas. For example, the notice of funding availability (72 Fed.
Reg 13980 (Mar. 23, 2007)) for the Alternatives Analysis Program laid
out the relative weights of the criteria: demonstrated need (30
points), potential impact on decision making (40 points), and capacity
of the applicant to carry out the proposed work successfully (30
points).
[28] U.S. Department of Transportation, FHWA, Assistance Agreement
Procedures Manual (May 2007).
[29] These were 3 urban partners and 6 unsuccessful UPA applicants,
including 3 PUPs.
[30] Three of these 5 applicants did not specify how they thought
political boldness was implied, a fourth cited its discussions with
department officials, and the fifth told us that the department's
frequently asked questions document said the department was seeking
projects that were politically challenging. Our review of the
frequently asked questions document did not find such a statement.
These were 2 urban partners and 3 unsuccessful UPA applicants,
including 1 PUP.
[31] This search included government-wide Federal Register notices from
January 1981 through July 2008.
[32] On Apr. 2, 2007, the department's Web site stated the department
was not requiring that each application include congestion pricing.
However, the Web site added that among the 4Ts, congestion pricing was
the most important and applications that excluded congestion pricing
would be at a competitive disadvantage against applications that
included congestion pricing.
[33] These were 5 urban partners and 9 unsuccessful UPA applicants,
including 4 PUPs.
[34] These were 3 urban partners and 6 unsuccessful UPA applicants,
including 3 PUPs.
[35] These were 2 urban partners and 3 unsuccessful UPA applicants,
including 1 PUP.
[36] Applicants were instructed to apply separately to the UPA
initiative and the individual grant programs. In the end, three of
these discretionary grant programs (FHWA's Delta Region Development,
Highways for Life, and Truck Parking Pilot programs) were not used to
fund UPA projects.
[37] This announcement also indicates that Value Pricing Pilot Program
and Small Starts funds may be used to fund urban partners, but does not
disclose amounts available under these grant programs.
[38] The department did not include funding information for the
Interstate Maintenance Discretionary Program in this handout because,
as a department official told us, the department thought it would use
these funds at the time for Corridors of the Future. However, urban
partners were ultimately awarded $50 million from this program.
[39] These were 3 urban partners and 3 unsuccessful applicants,
including 2 PUPs.
[40] These were 2 urban partners and 6 unsuccessful applicants,
including 2 PUPs.
[41] These were 1 urban partner and 3 unsuccessful applicants.
[42] Department officials told us that throughout the application
process, they provided advice to applicants about their proposed
initiatives, when asked to do so.
[43] The department indicated in the initial December 2006 UPA Federal
Register notice that late applications would be accepted to the extent
practicable.
[44] Statutes for the Value Pricing program and the Intelligent
Transportation Systems-Operational Testing to Mitigate Congestion
program authorize the use of tolling as a priority selection factor. As
we have previously noted, congestion pricing is a form of tolling;
therefore, we conclude the express provision for tolling in these
statutes authorizes the consideration of congestion pricing.
[45] The other sections of this report describe the 10 grant programs
the department has treated as being "under" and "within" the UPA
initiative, including the Alternatives Analysis Program. According to
the department, it did not use the 4Ts including tolling (congestion
pricing) in awarding Alternatives Analysis grants for fiscal year 2007,
but instead used the factors it identified in the Federal Register
notice soliciting grant applications. October 2008 DOT letter at 5-6;
see 72 Fed. Reg. 13980 (Mar. 23, 2007) (notice states that cities that
are "part of the Department's Congestion Initiative" would get
"additional consideration" but not "priority consideration" as the
department announced for the other grant programs). This analysis of
how the department applied tolling as a priority selection factor
therefore does not include the Alternatives Analysis grants.
[46] 23 U.S.C. §129(c).
[47] 23 U.S.C. §147(c).
[48] The UPA initiative management team consists of a team leader from
an FHWA team assigned to each urban partner and staff from different
modal administrations with backgrounds in information and project
management; congestion pricing; transit, technology, environment and
planning; and evaluation and performance management.
[49] American National Standards Institute, A Guide to the Project
Management Body of Knowledge, ANSI/PMI 99-001-2004 (2004).
[50] Alternatives Analysis, Bus and Bus Facilities, Ferry Boat
Discretionary, TCSP, Value Pricing Pilot, and ITS-OTMC programs.
[51] After New York City lost its designation and funding as an urban
partner, the department reallocated these funds to Los Angeles and
Chicago under the Congestion Reduction Demonstration Program. In
September 2008, the department hired Battelle to evaluate the Los
Angeles and Chicago congestion-reduction efforts. However, in January
2009 Chicago lost its designation as a Congestion Reduction
Demonstration partner, and as a result the department cancelled
Battelle's evaluation of Chicago's congestion-reduction projects.
[52] For fiscal year 2008, Congress directed that not more than 10
percent of the funds provided to carry out the bus program could be
used to fund the UPA initiative or any other new highway congestion
initiative such as the Congestion Reduction Demonstration program. Pub.
L. No. 110-161 (December 26, 2007). The department acknowledged that
this restriction would affect its use of fiscal year 2008 funds. See
Letter from D.J. Gribbin, General Counsel, DOT, to Susan D. Sawtelle,
Managing Associate General Counsel, GAO, Apr. 17, 2008).
[53] These include: (1) incorporating highway public-private
partnerships into its policy statements, such as its 2006 national
congestion strategy, which stated that the federal government should
remove or reduce barriers to private investment in the construction or
operation of transportation infrastructure; (2) using its
administrative flexibility to develop three experimental programs
(Special Experimental Projects Numbers 14 and 15 and the Innovative
Finance Test and Evaluation Program) to allow more private-sector
participation in federally funded highway projects; and (3) publishing
a public-private partnership manual that has material to educate state
transportation officials about highway public-private partnerships and
to promote their use. See GAO, Highway Public-Private Partnerships:
More Rigorous Up-front Analysis Could Better Secure Potential Benefits
and Protect the Public Interest, GAO-08-44 (Washington, D.C.: Feb. 8,
2008).
[54] Qualified private activity bonds are tax-exempt bonds issued by a
state or local government, the proceeds of which are used for a
defined, qualified purpose by an entity other than the government that
issued the bond.
[55] In December 2008, Florida cancelled this project because the firm
that was supposed to provide the equity for the project could not meet
its commitments.
[56] U.S. Department of Transportation, Federal Highway Administration,
Innovation Wave: An Update on the Burgeoning Private Sector Role in
U.S. Highway and Transit Infrastructure (July 18, 2008).
[57] U.S. Department of Transportation. The Secretary of
Transportation, Refocus. Reform. Renew. A New Transportation Approach
for America (July 2008).
[58] The Web site can be found at [hyperlink,
http://www.fhwa.dot.gov/ppp].
[59] For this analysis, we provide information on 11 of the 13 grant
programs that were available for the UPA initiative and Corridors. We
do not provide information on the remaining 2 programs because (1) no
funds were dedicated to the Intelligent Transportation Systems-
Operational Testing to Mitigate Congestion program during fiscal years
2004 through 2006 and (2) the department did not award Truck Parking
Pilot program funds in fiscal year 2007 for the UPA initiative or
Corridors.
The 11 grant programs in the analysis are the Alternatives Analysis;
Bus and Bus Related Facilities Discretionary Grant; Delta Region
Development; Ferry Boat Discretionary; Highways for Life; Innovative
Bridge Research and Deployment; Interstate Maintenance Discretionary;
New Starts/Small Starts; Public Lands Highway Discretionary Program;
Transportation, Community, and System Preservation; and Value Pricing
Pilot.
[60] As noted elsewhere in this report, the department treated 10 grant
programs as being "under" and "within" the UPA initiative, including
the Alternative Analysis program. According to the department, the
4T's, specifically tolling, were not used in awarding Alternative
Analysis grants. Letter from D.J. Gribbin, General Counsel, DOT, to
Susan Sawtelle, Managing Associate General Counsel, GAO, October 31,
2008 October 2008 DOT Letter)at 5-6; see 72 Fed. Reg. 13980 (Mar. 23,
2007). Therefore, this legal analysis does not include a discussion of
the Alternative Analysis grant.
[61] As part of our analysis and similar to our regular practice in
preparing legal opinions, we requested the department's legal position
on its authority to allocate its fiscal year 2007 lump-sum
appropriations to support the Urban Partner initiative and to select
grantees under the 9 underlying grant statutes using tolling as a
selection factor. See GAO, Procedures and Practices for Legal Decisions
and Opinions, [hyperlink, http://www.gao.gov/products/GAO-06-1064SP]
(Washington, D.C.: September 2006), [hyperlink,
http://www.gao.gov/legal/resources.html] (last visited Feb. 5, 2009).
The department provided its views in two letters, see Letters from D.J.
Gribbin, General Counsel, DOT, to Susan D. Sawtelle, Managing Associate
General Counsel, GAO, Apr. 17, 2008 (April 2008 DOT Letter) and Oct.
31, 2008 (October 2008 DOT Letter); in meetings on Oct. 9 and 23 and
Nov. 21, 2008; and in phone calls and e-mail correspondence.
[62] For example, the conference report stated that the department
should make $35 million in Ferry Boat and Ferry Boat Terminal Facility
funds available for 26 specifically identified projects and that it
should fund hundreds of specific Bus and Bus Facility projects at
levels totaling millions of dollars. See H. R. Rep. No. 109-307, at
158, 188, 191 (2005).
[63] See 71 Fed. Reg. 75806 (Dec. 18, 2006) (Intelligent Transportation
Systems-Operational Testing to Mitigate Congestion program); 71 Fed.
Reg. 77086 (Dec. 22, 2006) (Value Pricing Pilot Program); 72 Fed. Reg.
13522 (Mar. 22, 2007) (Ferry Boat Discretionary; Innovative Bridge
Research and Deployment; Interstate Maintenance Discretionary; Public
Lands Highway Discretionary; Highways for Life; Transportation,
Community, and System Preservation; Truck Parking Facilities Pilot; and
Delta Region Transportation Development programs); 72 Fed. Reg. 13974
(March 23, 2007) (Bus and Bus Facilities program); 72 Fed. Reg. 17982
(Apr. 10, 2007) (New Starts/ Small Starts program).
[64] The department had legal authority to allocate its lump sum
appropriations to discretionary grant programs even before the fiscal
year 2007 Continuing Resolution. Although the term "earmark" is often
used to refer to congressional funding designations contained in
conference reports, managers' statements, and other legislative
documents, only designations contained in enacted statutes are binding
as a matter of law. See, e.g., Lincoln, 508 U.S. at 192, quoting 55
Comp. Gen. 307, 319 (1975); Hein v. Freedom From Religion Foundation,
Inc., 551 U.S. 587, 127 S. Ct. 2553, 2568 n.7 (2007). The department
nevertheless followed these nonbinding earmarks, as do most agencies.
While it has long been settled that "expressions of committees dealing
with requests for appropriations cannot be equated with statutes
enacted by Congress," Tennessee Valley Authority v. Hill, 437 U.S. 153,
191 (1978), it is also true that "an agency's decision to ignore
congressional expectations may expose it to grave political
consequences." Lincoln, 508 U.S. at 193.
[65] See, e.g., GAO, Welfare Reform: Competitive Grant Selection
Requirement for DOT's Job Access Program Was Not Followed, GAO-02-213
(Washington, D.C., Dec. 7, 2001). Even where not required by statute,
some agencies have established competitive grant award procedures as a
matter of policy. See, e.g., GAO, Discretionary Grants: Further
Tightening of Education's Procedures for Making Awards Could Improve
Transparency and Accountability, [hyperlink,
http://www.gao.gov/products/GAO-06-268] (Washington, D.C., Feb. 21,
2006). Although the department has adopted the so-called agency "common
rules" concerning the award and management of grants, see 49 C.F.R.
Part 18, the rules do not address the issues raised here.
[66] The State Highway Comm'n of Missouri v. Volpe case cited above
illustrates a range of the department's discretion in making grant
awards. The court found there that the Federal-Aid Highway Act provided
the department with no discretion to withhold highway grant funds from
states once funds had been apportioned by statutory formula, but did
provide the department with discretion, as constrained by statutory
eligibility and selection criteria, to approve or disapprove which
specific state-proposed projects would receive that funding. The court
rejected the department's argument that it had discretion to hold back
the funds as a means of carrying out administration policy, noting that
"[i]t is impossible to find ...discretion ...to withhold approval on
projects ...because of a system of priorities the Executive chooses to
impose on all expenditures." Id. at 1114. As the court explained: "The
issue before us is not whether the Secretary abused his discretion in
[withholding funds] but whether the Secretary has been delegated any
discretion to so act in the first place... The Secretary [does not
possess] unfettered discretion as to when and how the monies may be
used. The Act circumscribes that discretion and only an analysis of the
statute itself can dictate the latitude of that discretion. . . . It
should require no citation of authority to reaffirm the proposition
that the Secretary's authority is limited to carrying out the law
according to its terms.... As has been observed, 'an agency may not
finally decide the limits of its statutory power.'" 479 F.2d at 1106-
07, 1109, 1124 (citation omitted) (emphasis added).
[67] Section 301 provides, "Except as provided in section 129 of this
title with respect to certain toll bridges and toll tunnels, all
highways constructed under the provisions of this title shall be free
from tolls of all kinds." "Highway" is defined to include a road,
street, or parkway; a bridge, tunnel, right-of-way, or other facility
in connection with a highway; and the portion of any interstate bridge
or tunnel or approach paid for by a state. 23 U.S.C. § 101(a)(11).
[68] As relevant here, tolling is permitted on certain interstate and
noninterstate highways, bridges, and tunnels and certain ferry boats,
terminals, and approaches; see 23 U.S.C. § 129(a)-(c). In addition,
states and localities are authorized to toll facilities participating
in certain pilot programs such as the Value Pricing Pilot Program
discussed below, see 23 U.S.C. § 149 note, and, as of 2005, high-
occupancy-vehicle (HOV) lanes that are converted to high-occupancy-toll
(HOT) lanes; see 23 U.S.C. § 166.
[69] The department notes as well that while the Bus program provision
of 49 U.S.C. § 5309(b)--authorizing the department to make grants to
"replace, rehabilitate and purchase buses and related equipment and to
construct bus-related facilities"--does not have a specific statutory
tolling requirement, another clause in the Capital Investment Grants
statute--49 U.S.C. § 5309(c)(1)(A)--prohibits the department from
approving any grant unless the department "determines that the project
is part of an approved transportation plan and program of projects
under 49 U.S.C. § 5303," which, in turn ties in to congestion
reduction. April 2008 DOT Letter at 6-7. The department states that
using tolling as a selection factor for bus grants "is fully consistent
with" the requirements of 49 U.S.C. § 5303, including section
5303(k)(3)'s requirement that transportation planning in large cities
address "congestion management" through Title 23 (highway) grant
projects involving "travel demand reduction and operational management
strategies" such as the 4Ts. April 2008 DOT Letter at 7.
[70] Pullman involved section 3(a) of the Urban Mass Transportation Act
of 1964, Pub. L. No. 88-365, formerly codified at 49 U.S.C. § 1602(a).
[71] According to the department's technical evaluation forms, projects
were proposed by non-urban partners that the evaluator determined met
at least one of the statutory priorities in Alaska (3 projects),
Connecticut (1 project), Florida (2 projects), Hawaii (1 project),
Illinois (1 project), Kentucky (2 projects), Louisiana (2 projects),
Massachusetts (3 projects), New York (1 project), Ohio (3 projects),
the U.S. Virgin Islands (2 projects), and Virginia (2 projects).
[72] The ferry systems in Seattle, New York City, and San Francisco--
the three urban partners that received Ferry Boat grants in fiscal year
2007--are the three largest in the country. In 2006, the Seattle system
(Washington state, Kitsap Transit, and Pierce County) had 24.45 million
passenger trips, the New York City system (New York City Department of
Transportation, Port Authority of New York and New Jersey, and Metro
North Ferry) had 22.28 million passenger trips, and the San Francisco
system (Golden Gate, Vallejo, and Alemeda) had 3.44 million passenger
trips. The remaining top 10 ferry systems had between 1.93 million and
0.16 million passenger trips (Puerto Rico and Broward County, Florida,
respectively). See FTA National Transit Database, 2006.
[73] The technical evaluator may have made additional errors, because
he also determined that many of the other proposed individual projects
did meet "the greatest number of passengers" factor, including another
project in Seattle (Guemes Island Ferry Dock Repair).
[74] The department also must ensure that there is an "equitable
distribution" of TCSP funds to a diversity of populations and
geographic regions. Id. sec. 1117(f).
[75] See Transportation Equity Act for the 21st Century, Pub. L. No.
105-178, § 1221(c)(3) (June 9, 1998) ("Criteria.--In allocating funds
made available to carry out this subsection, the Secretary shall give
priority to applicants that [meet certain criteria].") (planning
grants), (d)(2) (implementation grants)(same)(emphasis added). The
department told us that primarily because of congressional earmarks, to
date it has been able to award discretionary grants in only 3 of the
program's 10 years--the first 2 years (fiscal year 1999 and fiscal year
2000) and the year at issue here, fiscal year 2007. See generally FHWA,
Transportation and Community and System Preservation Pilot Program,
Third-Year Report ("FHWA Third-Year Report") at 2 (noting grantee,
federal program partner, and stakeholder groups' concerns that the TCSP
program's intended focus was decreasing because of earmarks).
[76] See Safe, Accountable, Flexible, Efficient Transportation Equity
Act: A Legacy for Users, Pub. L. No. 109-59, § 1117(e) (Aug. 10, 2005)
("Criteria.--In allocating funds made available to carry out this
section, the Secretary shall give priority consideration to applicants
that [meet certain criteria].")(emphasis added).
[77] As the Federal Circuit explained in Pope (involving whether a
veteran's preference candidate had been given the requisite priority
consideration for an attorney position), "in a nutshell, 'priority
consideration' requires the deciding official [to] treat the priority
candidate as 'first in line, up or down"... There of course is no
assurance that a priority candidate will be picked for the open job,
but there is assurance that the priority candidate will not have his
application compared with the applications of others, and he is not in
competition with others." Pope, 311 F.3d at 1382. See also Watts v.
Carlson, 854 F.2d 528 (Table), 1988 WL 81534 *2 (D.C. Cir. 1988)
(unpublished opinion) (interpreting "priority consideration" in the
context of federal employment litigation using dictionary definitions,
the court found that "[t]he precedence conferred ...related only to
consideration, not selection. Watts was entitled to have his
applications ...considered prior to applications submitted by other
candidates. The agreement did not guarantee that the consideration
received would be entirely favorable, resulting in selection and
promotion.").
[78] See FHWA, TEA-21 - Transportation Equity Act for the 21ST Century,
Fact Sheet, "Transportation and Community and System Preservation Pilot
Program" (Sept. 14, 1998) ("DOT TEA-21 Fact Sheet"), available at
[hyperlink, http://www.fhwa.dot.gov/tea21/factsheets/t-c-sp.htm] (last
visited November 6, 2008); FHWA, Office of Legislation and Strategic
Planning, Program Analysis Team, SAFETEA-LU, Fact Sheets on Highway
Provisions, "Transportation, Community, and System Preservation
Program" (Oct. 25, 2007) ("DOT SAFETEA-LU Fact Sheet"), available at
[hyperlink, http://www.fhwa.dot.gov/safetealu/factsheets/tcsp.htm]
(last visited Nov. 7, 2008).
[79] Pub. L. No. 109-59, § 1117(e) provides: "(e) Criteria.--In
allocating funds made available to carry out this section, the
Secretary shall give priority consideration to applicants that--"(1)
have instituted preservation or development plans and programs that--
"(A) are coordinated with State and local preservation or development
plans, including transit-oriented development plans; "(B) promote cost-
effective and strategic investments in transportation infrastructure
that minimize adverse impacts on the environment; or "(C) promote
innovative private sector strategies; "(2) have instituted other
policies to integrate transportation, community, and system
preservation practices, such as--"(A) spending policies that direct
funds to high-growth areas; "(B) urban growth boundaries to guide
metropolitan expansion; "(C) 'green corridors' programs that provide
access to major highway corridors for areas targeted for efficient and
compact development; or "(D) other similar programs or policies as
determined by the Secretary; "(3) have preservation or development
policies that include a mechanism for reducing potential impacts of
transportation activities on the environment; "(4) demonstrate a
commitment to public and private involvement, including the involvement
of nontraditional partners in the project team; and "(5) examine ways
to encourage private sector investments that address the purposes of
this section." (Emphasis added).
[80] See, e.g., DOT Press Release (Jan. 13, 1999) (describing TCSP as a
program created "to help protect the environment and improve access to
jobs, services, and the marketplace.").
[81] The department cites Action for Boston Community Development, Inc.
v. Shalala, 136 F.3d 29 (1ST Cir. 1998), and Reiter v. Sonotone Corp.,
442 U.S. 330 (1979), to show that "and" can mean "or" based on context.
We agree, but the holdings of those cases do not support the
department's position. Reiter held that "or" in the Clayton Act means
"or," and thus supports our interpretation of the TCSP statute. Boston
Community Development held that "and" means "or" but for reasons not
applicable here. The case involved a challenge by a Head Start provider
to the non-renewal of its grant by the Department of Health and Human
Services (HHS) under a statute giving long-time providers priority
unless HHS finds they "fail to meet program, financial management, and
other requirements established by the Secretary." 136 F.3d at 31
(emphasis added). The court held that "and" meant "or" because
otherwise, HHS would have to renew the grant unless the provider failed
in all respects, potentially endangering young children. The court also
focused on the catch-all "and other requirements," a virtually
limitless list of standards that a provider would have to fail before
HHS could terminate. The result is the opposite for TCSP, where the
public interest favors priority for those who achieve more of the
program's purposes, not fewer, and where there is no similar catch-all
language.
[82] See, e.g., FHWA, Office of Legislation and Intergovernmental
Affairs, Program Analysis Team, "Safe, Accountable, Flexible, Efficient
Transportation Equity Act: A Legacy for Users--A Summary of Highway
Provisions," at 16-17 (Aug. 25, 2005); 63 Fed. Reg. 49632, 49633 (Sept.
16, 1998); 64 Fed. Reg. 25098, 25099-25101, 25103 (May 10, 1999).
[83] FHWA, Transportation and Community and System Preservation Pilot
Program, First-Year Accomplishments ("FHWA First-Year Report"); FHWA
Third-Year Report at 3-4 (same), 12 ("while maintaining highway
mobility is important, we can no longer 'build' our way out of traffic
congestion."), 19 ("Rather than simply being perceived as the 'highway
builder,' TCSP allows the department to introduce transportation design
and investment policies as a legitimate--and important--component of
community preservation activities ...bringing a more wholistic [sic]
approach").
[84] See, e.g., DOT TEA-21 Fact Sheet, above (paraphrasing five
priority factors in section 1221(d)(2)(B) and underlining "and" between
last two factors); DOT SAFETEA-LU Fact Sheet, above (paraphrasing five
priority selection factors in section 1117(e) and using "and" between
last two factors); TCSP Additional Information (Attachment 1 to Mar 22,
2007 FHWA Associate Administrator Memorandum re Information: TCSP
Request for Fiscal Year 2007 Grant Applications) (stating for
"Selection Criteria" that "activities funded under the TCSP Program
must address and integrate each of the purposes of the program")
(emphasis added); 63 Fed. Reg. 49632, 49634, 49637, but see id. at
49635 (Sept. 16, 1998) (same; "If a proposal does not address one or
more purposes, the applicant must clearly state why each purpose was
not addressed. Priority will be given to those proposals which clearly
and comprehensively meet and integrate the greatest number of purposes
....")(emphasis added); 64 Fed. Reg. 25098, 25104, 25106, 25112 (May
10, 1999)("The panel looked for proposals that ...specifically
address[ed] each of these [TCSP purposes]. In some cases, a proposal
would indicate that if congestion were reduced that would also increase
access to jobs [but] [t]he panel looked for more proactive solutions .
...") (emphasis added); 64 Fed. Reg. 63366, 63369 (Nov. 19, 1999)
(same); 65 Fed. Reg. 55317, 55318, 55322 (Sept. 13, 2000) (same); FHWA
First-Year Report ("The emphasis ...is on strategies that meet all of
these objectives rather than just one or two. TCSP is not simply an
economic development or environmental preservation program. Instead,
projects should search for ways to reconcile transportation system
performance, infrastructure costs, economic needs, and environmental
impacts.") (emphasis added).
[85] A fixed guideway is any transit service that uses exclusive or
controlled rights of way or rails, such as light and heavy rails,
commuter rails, automated fixed guideway systems such as "people
movers," and busway/HOV lanes.
[86] The New Starts selection criteria do not apply to grants for less
than $25 million until certain regulations have been finalized. See 49
U.S.C. § 5309(3)(1)(B). Although the department has proposed
regulations, it has not finalized them because of appropriations act
restrictions. See, e.g., Transportation, Housing and Urban Development,
and Related Agencies Appropriations Act, 2008, Pub. L. No. 110-161,
sec.170, 121 Stat. 2401 (Dec. 26, 2007).
[87] San Francisco has since removed the congestion-reduction aspects
of its grant project, Doyle Drive, but the department has retained this
grant under San Francisco's UPA because the other grants under the
agreement include congestion-reduction components.
[End of section]
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