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United States General Accounting Office: 
GAO: 

Report to Congressional Committees: 

April 2002: 

Mass Transit: 

FTA’s New Starts Commitments for Fiscal Year 2003: 

GAO-02-603: 

Contents: 

Letter: 

Results in Brief: 

Background: 

FTA’s Evaluation and Rating Process for New Starts Proposals Finalized: 

FTA Proposes Four Projects for New Starts Funding in Fiscal Year 2003: 

FTA Ends TEA-21 Authorization Period with Unused Commitment Authority: 

Proposals to Cap New Starts Funding May Bring Mixed Results: 

Concluding Observations: 

Agency Comments: 

Scope and Methodology: 

Appendixes: 

Appendix I: FTA’s Fiscal Year 2003 New Starts Ratings and Funding 
Recommendations: 

Appendix II: Projects Proposing a New Starts Share of Over 50 Percent: 

Appendix III: Transit Agencies and Metropolitan Planning Organizations 
Contacted by GAO: 

Tables: 

Table 1: Projects Recommended for New Starts Funding in Fiscal Year 
2003: 

Table 2: FTA’s New Starts Commitment Authority and Funding 
Commitments, March 2002: 

Figures: 

Figure 1: FTA’s New Starts Evaluation and Rating Process: 

Figure 2: New Starts Funding Proposals, Fiscal Year 2003: 

Abbreviations: 

BRT: Bus Rapid Transit: 

DOT: Department of Transportation: 

FFGA: Full funding grant agreement: 

FTA: Federal Transit Administration: 

ISTEA: Intermodal Surface Transportation Efficiency Act of 1991: 

LRT: Light Rail Transit: 

MOS: Minimal Operating Segment: 

MPO: Metropolitan Planning Organization: 

P.L. Public Law: 

TEA-21: Transportation Equity Act for the 21st Century: 

TSM: Transportation System Management: 

[End of section] 

United States General Accounting Office: 
Washington, D.C. 20548: 

April 30, 2002: 

The Honorable Paul S. Sarbanes: 
Chairman: 
The Honorable Phil Gramm: 
Ranking Minority Member: 
Committee on Banking, Housing, and Urban Affairs: 
United States Senate: 

The Honorable Don Young: 
Chairman: 
The Honorable James L. Oberstar: 
Ranking Democratic Member: 
Committee on Transportation and Infrastructure: 
House of Representatives: 

Since the early 1970s, the federal government has provided a large 
share of the nation’s capital investment in urban mass transportation. 
Much of this investment has come through the Federal Transit 
Administration’s (FTA) New Starts program, which helps pay for certain 
rail, bus, and trolley projects through full funding grant 
agreements.[Footnote 1] The maximum amount of federal funds available 
to a project cannot exceed 80 percent of the estimated net cost. In 
the last 9 years, this program has provided state and local agencies 
with over $7 billion to help design and construct transit projects 
throughout the country. 

The Transportation Equity Act for the 21st Century (TEA-21),[Footnote 
2] enacted in 1998, authorized about $6 billion in “guaranteed” 
funding for the New Starts program through fiscal year 2003. Although 
the level of New Starts funding is higher than it has ever been, the 
demand for these resources is also extremely high. TEA-21 identified 
over 190 projects nationwide as eligible to compete for New Starts 
funding. FTA was directed to prioritize projects for funding by 
evaluating, rating, and recommending potential projects on the basis 
of specific financial and project justification criteria. Furthermore, 
TEA-21 required FTA to issue regulations for the evaluation and rating 
process. The final rule became effective in 2001. 

In addition, TEA-21 requires us to report each year on FTA’s processes 
and procedures for evaluating, rating, and recommending New Starts 
projects for federal funding and on the implementation of these 
processes and procedures.[Footnote 3] In light of what we saw as an 
impending “budget crunch,” we recommended in March 2000 that the 
Department of Transportation (DOT) further prioritize among the 
projects it rates as “highly recommended” and “recommended” for 
funding purposes.[Footnote 4] DOT has not fully implemented this 
recommendation. This report discusses (1) FTA’s evaluation and rating 
process, including its implementation of the final rule; (2) FTA’s 
fiscal year 2003 New Starts report and budget proposal, including new 
projects that FTA is proposing for grant agreements; (3) FTA’s 
remaining New Starts commitment authority, and (4) the impact of 
imposing a cap of 50 or 60 percent of project costs on New Starts 
funding for transit projects. 

Results in Brief: 

FTA’s finalized New Starts evaluation process assigns candidate 
projects individual ratings for project justification and local 
financial commitment criteria contained in TEA-21. The process also 
assigns an overall rating that is intended to reflect the project’s 
overall merit. FTA considers these overall ratings to decide which 
projects will proceed to the preliminary engineering and final design 
phases, be recommended for funding, and receive full funding grant 
agreements. Although FTA’s New Starts project evaluation and rating 
process for fiscal year 2003 was very similar to that of fiscal year 
2002, the agency made a number of refinements to the process. For 
instance, for fiscal year 2003, potential grantees were more strictly 
assessed on their ability to build and operate proposed projects than 
in the past. Such assessments are meant to ensure that no outstanding 
issues concerning a project’s scope or cost or a locality’s financial 
commitment could jeopardize the project once a full funding grant 
agreement is signed. 

In addition, FTA made a number of technical changes in its evaluation 
of proposed projects based on the final rule for the New Starts 
evaluation process, which became effective in 2001. For example, FTA 
has replaced the “cost per new rider” measure of cost effectiveness 
with a new measure of “transportation system user benefits,” which 
emphasizes the potential reduction in the amount of travel time and 
out-of-pocket costs that people would incur taking a trip. FTA is 
currently in the process of phasing in this measure. 

FTA’s evaluation process led it to recommend four projects for funding 
commitments for fiscal year 2003 in its New Starts report and budget 
proposal. FTA evaluated 50 proposed projects for fiscal year 2003 and 
developed ratings for 31 of them.[Footnote 5] Twenty-seven of these 
projects were rated as highly recommended or recommended. FTA proposed 
grant agreements for two of these projects because they met its “
readiness”[Footnote 6] and technical capacity criteria. The remaining 
25 highly recommended or recommended projects were not proposed for 
grant agreements for several reasons. According to FTA, the majority 
of these projects did not meet tests for readiness and technical 
capacity. FTA is recommending two additional projects for funding 
commitments in fiscal year 2003 that were rated last year and proposed 
for grant agreements. FTA considers these “pending federal commitments.”
 
Although FTA has been faced with an impending transit budget crunch for 
several years, the agency will end the TEA-21 authorization period with 
$310 million in unused commitment authority for several reasons. 
First, in fiscal year 2001, the Congress substantially increased FTA’s 
authority to make contingent commitments, subject to future 
authorizations and appropriations. Second, to preserve commitment 
authority for future projects, FTA did not request any funding for 
preliminary engineering activities in the fiscal year 2002 and 2003 
budget proposals—a routine practice in prior years. Third, in 
determining which projects are ready for grant agreements, FTA has 
applied strict tests for readiness and technical capacity. As a 
result, fewer projects than expected were recommended for New Starts 
funding for fiscal years 2002 and 2003. For instance, only 2 of the 14 
projects that FTA officials estimated last year would be ready for 
grant agreements are being proposed for funding commitments in fiscal 
year 2003. We note, however, that the timing and magnitude of New 
Starts projects dictates how much commitment authority is available 
for future projects. Finally, about half of the unused commitment 
authority ($157 million) results from FTA’s response to the 
recommendation in our August 2001 report to “release” the commitment 
authority reserved for a Los Angeles subway project for which the 
federal funding commitment had been withdrawn. 

Proposals to limit the amount of New Starts funds that could be 
applied to projects would allow more projects to receive such funding, 
but could negatively affect specific projects being developed and the 
local transportation planning process. For example, based on current 
estimates of project costs, limiting New Starts funds to 60 percent of 
a project’s cost for the 49 projects[Footnote 7] currently in final 
design or preliminary engineering would “free up” about $500 million 
for additional projects. However, only 20 percent of these projects 
currently being developed plan to use New Starts funds for over 60 
percent of project costs and would be affected by such a cap. While 
some project officials indicated that they may be able to make up for 
the reduced New Starts commitment with other federal or local funds, 
others would not be able to tap into any other funding sources and 
therefore would have to modify their scope or schedule or even 
terminate the project. Furthermore, any decision to make up the 
difference with additional federal or local funds could affect other 
transportation projects. For example, one project official indicated 
that redirecting funds from highway or other transit projects would 
indefinitely delay these projects until additional funding is 
available. Finally, officials from several Metropolitan Planning 
Organizations (MPO) stated that a cap on New Starts funds could 
influence their selection of highway over transit projects since the 
decisions are often affected by the availability of funds from various 
federal programs and which projects will receive the highest federal 
share. 

Background: 

TEA-21 authorized a total of $36 billion in “guaranteed” funding 
[Footnote 8] through 2003 for a variety of transit programs, including 
financial assistance to states and localities to develop, operate, and 
maintain transit systems. One of these programs, the New Starts 
program, provides funds to transit providers for constructing or 
extending certain types of mass transit systems.[Footnote 9] A full 
funding grant agreement (FFGA) establishes the terms and conditions 
for federal participation, including the maximum amount of 
federal funds available for the project, which by statute cannot 
exceed 80 percent of its estimated net cost. The grant agreement also 
defines a project’s scope, including the length of the system and the 
number of stations; its schedule, including the date when the system 
is expected to open for service; and its cost. To obtain a grant 
agreement, a project must first progress through a local or regional 
review of alternatives, develop preliminary engineering plans, and 
obtain FTA’s approval for final design.[Footnote 10] 

TEA-21 requires that FTA evaluate projects against “project 
justification” and “local financial commitment” criteria contained in 
the act. FTA assesses the project justification or technical merits of 
a project proposal by reviewing the project’s mobility improvements, 
environmental benefits, cost-effectiveness, and operating 
efficiencies. In assessing the stability of a project’s local 
financial commitment, FTA assesses the project’s finance plan for 
evidence of stable and dependable financing sources to construct, 
maintain, and operate the proposed system or extension. In evaluating 
this commitment, FTA is required to determine whether (1) the proposed 
project’s finance plan incorporates reasonable contingency amounts to 
cover unanticipated cost increases; (2) each proposed local source of 
capital and operating funds is stable, reliable, and available within 
the timetable for the proposed project; and (3) local resources are 
available to operate the overall proposed mass transportation system 
without requiring a reduction in existing transportation services. 
[Footnote 11] 

Although these evaluation requirements existed prior to the enactment 
of the act, TEA-21 requires FTA to (1) develop a rating for each 
criterion as well as an overall rating of highly recommended, 
recommended, or not recommended and use these evaluations and ratings 
in approving projects’ advancement to the preliminary engineering and 
final design phases and approving grant agreements; and (2) issue 
regulations on the evaluation and rating process. TEA-21 also directs 
FTA to use these evaluations and ratings to decide which projects to 
recommend to the Congress for funding in a report due each February. 
[Footnote 12] These funding recommendations are also reflected in the 
department’s annual budget proposal. In addition, TEA-21 requires FTA 
to issue a supplemental report to the Congress each August that 
updates information on projects that have advanced to the preliminary 
engineering or final design phases since the annual report. 

FTA’s Evaluation and Rating Process for New Starts Proposals Finalized: 

In April 2000, we reported that FTA had made substantial progress in 
developing and implementing an evaluation process that included the 
individual criterion ratings and overall project ratings required by 
TEA-21.[Footnote 13] Before TEA-21 was enacted, FTA had already taken 
steps to revise its evaluation process of the New Starts program 
because most of the evaluation requirements contained in the act were 
introduced by the Intermodal Surface Transportation Efficiency Act of 
1991 (ISTEA). FTA uses the results to approve projects for the 
preliminary engineering and final design phases, to execute grant 
agreements, and to make annual funding recommendations to the 
Congress. FTA’s final rule, issued in December 2000, formalized the 
evaluation and rating process.[Footnote 14] This year’s process used 
most of the procedures set forth in the final rule. 

New Starts Evaluation and Rating Process Assesses Project’s 
Justification and Local Financial Commitment: 

FTA’s current New Starts evaluation process assigns candidate projects 
individual ratings for each TEA-21 criterion to assess each project’s 
justification and local financial commitment. The process also assigns 
an overall rating that is intended to reflect the project’s overall 
merit. FTA considers these overall ratings to decide which projects 
will proceed to the preliminary engineering and final design phases, 
be recommended for funding, and receive full funding grant agreements 
(see figure 1 for an illustration of the process). 

Figure 1: FTA’s New Starts Evaluation and Rating Process: 

[Refer to PDF for image: process map] 

Stage 1: Individual criterion ratings: 
* Local share rating[A]; 
* Capital finance plan rating; 
* Operating finance plan rating; 
[these advance to Local financial commitment rating in Stage 2]; 
* Mobility improvements rating; 
* Environmental benefits rating; 
* Operating efficiencies rating; 
* Cost-effectiveness rating; 
* Land-use rating; 
[these advance to Project justification rating in Stage 2]. 

Stage 2: Summary ratings; 
* Local financial commitment rating; 
* Project justification rating; Other factors[B] added here. 

Stage 3: Overall project rating. 

Source: FTA. 

[A] The local share is the percentage of a project’s capital cost to 
be funded from sources other than federal funds. 

[B] According to FTA, this optional criterion gives grantees the 
opportunity to provide additional information about a project that may 
add confidence of the project’s overall success. 

A project’s overall rating is a combination of the project’s 
justification and local financial commitment ratings. With respect to 
project justification, FTA provides individual ratings for the four 
criteria identified by TEA-21—-mobility improvements, environmental 
benefits, operating efficiencies, and cost-effectiveness-—as well as 
the degree to which existing development patterns and local land-use 
policies are likely to foster transit-supportive land use. According 
to FTA, the agency also considers a variety of other factors when 
evaluating the project’s justification, including the degree to which 
policies and programs are in place as assumed in the forecasts, the 
project’s management capability, and additional factors relevant to 
local and national priorities. To evaluate a project’s local financial 
commitment, FTA rates the project on its capital and operating finance 
plans and the local share of its costs.[Footnote 15] Due to the 
competitive nature of the New Starts program, FTA is continuing to 
encourage project sponsors to lower the requested New Starts funding. 

After analyzing the documentation submitted by the project’s sponsors, 
FTA assigns a descriptive rating (high, medium-high, medium, medium-
low, or low) for each of the project justification and local financial 
commitment criteria. As figure 1 shows, once the individual criterion 
ratings are completed, FTA assigns summary project justification and 
local financial commitment ratings by combining the individual 
criterion ratings. In developing the summary project justification 
rating, FTA gives the most weight to the criteria for transit-
supportive land use, cost-effectiveness, and mobility improvements. 
[Footnote 16] The summary local financial commitment ratings, the 
measures for the proposed local share of capital costs and the 
strength of the capital and operating financial plans are given equal 
consideration. FTA combines the summary project justification and 
local financial commitment ratings to create an overall rating for the 
project of highly recommended, recommended, or not recommended. To 
receive a highly recommended rating, a project must have summary 
ratings of at least medium-high for the project justification and 
local financial commitment. To receive a rating of recommended, the 
project must have summary ratings of at least medium. A project is 
rated as not recommended when either summary rating is lower than 
medium. FTA has also added one-letter indicators to the not 
recommended rating that explain where an improvement is needed—“j” for 
project justification, “o” for the operating finance plan, and “c” for 
the capital finance plan. 

In preparing its New Starts funding proposal each year, FTA first 
accounts for projects with existing grant agreements. Consideration is 
then given to projects with an overall rating of recommended or 
higher. However, some projects rated as highly recommended or 
recommended may not meet FTA’s readiness test for funding. A project 
passes the readiness test when there is a minimum of risk associated 
with the project being constructed on time and within budget. FTA uses 
a number of milestones to make this determination. For example, FTA 
determines whether the necessary real estate has been acquired, 
utility arrangements have been made, and local funding sources are in 
place. According to an FTA official, this ensures that there are no 
“red flags” signaling that the project has outstanding issues it 
must address. In addition, FTA considers the following issues in 
evaluating grantees: 

* the degree to which the transit agency has a satisfactory plan to 
manage an existing bus fleet to ensure no degradation of service for 
users of a current system; 

* compliance with the Americans with Disabilities Act of 1990, 
including obtaining financial commitments necessary to maintain 
accessible service, make necessary improvements, and comply with key 
requirements for stations; and; 

* compliance with air quality standards in the region. 

For its New Starts report for fiscal year 2003, FTA evaluated a total 
of 50 projects and provided overall ratings for 31 of these 
projects.[Footnote 17] Of the 31 projects that were rated, 25 were 
rated as recommended, 2 projects were rated as highly recommended, and 
4 projects received not recommended ratings. According to FTA, few 
projects received highly recommended ratings because FTA has set the 
bar high for such ratings.[Footnote 18] Projects must have a good 
strong rating for justification (i.e., at least a medium) and a strong 
local financial commitment rating (i.e., at least a medium-high) to 
receive such ratings. FTA believes that few projects received a not 
recommended rating because project officials have a better 
understanding of the evaluation and rating process and criteria being 
used to assess a project’s justification and local financial 
commitment. 

In assigning overall project ratings, FTA emphasized the continuous 
nature of project evaluation. Throughout the New Starts report, FTA 
underscored the fact that as candidate projects proceed through the 
final design stage, information concerning costs, benefits, and 
impacts will be refined. Consequently, FTA updates its ratings and 
recommendations at least annually to reflect this new information, 
changing conditions, and refined financing plans. Thus, a project that 
is rated as recommended in the fiscal year 2003 report could receive a 
higher or lower rating in the fiscal year 2004 report to reflect 
changes in the project. For example, in the fiscal year 2002 report, 
the Charlotte (South Corridor Light Rail Transit) project received a 
recommended rating. However, this year the project received a highly 
recommended rating. FTA attributed the project’s improved rating to 
strong transit-supportive land-use policies in place to support the 
proposed light rail project and an improved finance plan. 

Final Rule Refines New Starts Evaluation Process: 

Although the criteria and measures in the New Starts evaluation and 
rating process have not changed, FTA’s final rule, issued in December 
2000, made a number of refinements to the process. The final rule was 
used as FTA considered its New Starts proposals for fiscal year 2003. 
The most significant changes to FTA’s evaluation process focus on four 
key issues: 

* the measure of cost-effectiveness, 

* the use of a no-build and Transportation System Management (TSM) 
alternative for evaluation purposes, 

* the overall project rating, and, 

* the measure for mobility improvements. 

Historically, FTA used a cost per new rider measure to indicate the 
cost-effectiveness of a proposed project. The consensus of commenters 
on the proposed rule was that the focus on new riders ignores benefits 
provided to other riders, which may bias the measure against cities 
with “mature” transit systems, where the focus of a proposed project 
may be to improve service, not attract new riders. In response to 
comments on the proposed rule, FTA replaced the cost per new rider 
measure with a new measure of transportation system user benefits. 
According to FTA, this measure is based on the basic goals of any 
major transportation investment—to reduce the amount of travel time 
and out-of-pocket costs that people incur for taking a trip (i.e., the 
cost of mobility). This approach deemphasizes the number of new riders 
by measuring not only the benefits to people who change transportation 
modes (e.g., highways to transit) but also benefits to existing riders 
and highway users. 

FTA no longer evaluates a proposed project (such as light rail) 
against both a separate no-build and TSM alternatives. For fiscal year 
2003, FTA evaluated proposed New Starts projects against a single 
“baseline alternative” agreed upon by project sponsors and FTA. The 
baseline alternative involves transit improvements that are lower in 
cost than the proposed New Start project, which result in improved 
transit mobility compared to the no-build alternative. The purpose of 
the baseline comparison is to isolate the costs and benefits of the 
proposed major transit investment. 

FTA has also added one-letter indicators to the not recommended rating 
to explain where improvement is needed—j for project justification, o 
for the operating funding plan, and c for the capital finance plan. 
For example, in the fiscal year 2003 New Starts report, the Cincinnati 
(Interstate 71 Corridor Light Rail) project was found to need 
improvement in the capital finance plan and was rated as not 
recommended (c). 

Finally, FTA refined the measure for mobility improvements. In the 
past, this measure was based on (1) projected savings in travel time 
and (2) the number of low-income households within a half-mile of the 
proposed stations. In response to concerns about the scope of this 
measure, FTA added a new factor for destinations of jobs within a half-
mile of boarding points on the new systems. This new factor 
complements the existing factor of low-income households within a half-
mile of boarding points. 

FTA Proposes Four Projects for New Starts Funding in Fiscal Year 2003: 

FTA’s New Starts report and budget for fiscal year 2003 requests that 
$1.21 billion be made available for the construction of four new 
transit systems and expansions of existing systems through the New 
Starts program (see appendix I for FTA’s 2003 budget proposal and 
project ratings). After amounts for FTA oversight activities and for 
other purposes specified by TEA-21[Footnote 19] are subtracted, a 
total of $1.19 billion would remain available for projects in 
fiscal year 2003. Of this amount, a total of $1.03 billion would be 
allocated among 25 projects with existing grant agreements. An 
additional $134.1 million would be allocated to the four projects 
proposed for grant agreements.[Footnote 20] The remaining $31 million 
would be allocated to five “meritorious” projects to continue project 
development.[Footnote 21] (See figure 2.) 

Figure 2: New Starts Funding Proposals, Fiscal Year 2003: 

[Refer to PDF for image: pie-chart] 

Existing FFGAs: $1.027 billion; (84%); 
Proposed new projects: $134.1 million; (11%); 
Meritorius projects: $31 million (3%); 
Mandated projects: $10.3 million (1%); 
Project management oversight: $12.14 million (1%). 

Source: GAO’s analysis of FTA data. 

[End of figure] 

For fiscal year 2003, FTA evaluated 50 projects and prepared ratings 
for 31 of them. Of the 31 projects that received ratings, FTA rated 27 
projects as highly recommended or recommended, and proposed executing 
new grant agreements for 2 projects that are expected to meet the 
readiness criteria by the end of fiscal year 2003. In addition, FTA is 
proposing two other projects for grant agreements for fiscal year 
2003. These two projects—-New Orleans (Canal Street Spine) and San 
Diego (Oceanside-Escondido Rail Corridor) were not rated this year. 
Although they were proposed for funding commitments last year, the 
grant agreements were not executed, and FTA characterizes the projects 
as pending federal commitments. According to FTA, the ratings for 
these two projects from last year are still valid.[Footnote 22] (Table 
1 shows the ratings for the four projects recommended for New Starts 
funding in fiscal year 2003.) 

Table 1: Projects Recommended for New Starts Funding in Fiscal Year 
2003: 

Project: Los Angeles (East Side Corridor LRT); 
Overall project rating: Recommended; 
Financial rating: 
Financial rating criteria: Medium-high; 
Capital finance rating: Medium; 
Operating finance rating: Medium; 
Project justification rating: Medium; 
Project justification criteria: 
Mobility improvement rating: Medium; 
Environmental benefits rating: High; 
Operating efficiency rating: Medium; 
Cost-effectiveness rating: Low; 
Land use rating: Medium-high. 

Project: New Orleans (Canal Street Spine); 
Overall project rating: Recommended; 
Financial rating: Medium; 
Financial rating criteria: 
Capital finance rating: Medium-high; 
Operating finance rating: Medium; 
Project justification rating: Medium-high; 
Project justification criteria: 
Mobility improvement rating: Medium; 
Environmental benefits rating: Medium; 
Operating efficiency rating: Not rated; 
Cost-effectiveness rating: High; 
Land use rating: Medium. 

Project: Salt Lake City (Medical Center Extension LRT); 
Overall project rating: Recommended; 
Financial rating: Medium-high; 
Financial rating criteria: 
Capital finance rating: Medium-high; 
Operating finance rating: Medium-high; 
Project justification rating: Medium; 
Project justification criteria: 
Mobility improvement rating: Low-medium; 
Environmental benefits rating: Medium; 
Operating efficiency rating: Medium; 
Cost-effectiveness rating: Medium; 
Land use rating: Medium. 

Project: San Diego (Oceanside-Escondido Rail Corridor); 
Overall project rating: Highly recommended; 
Financial rating: Medium-high; 
Financial rating criteria: 
Capital finance rating: Medium-high; 
Operating finance rating: Medium-high; 
Project justification rating: Medium-high; 
Project justification criteria: 
Mobility improvement rating: Medium-high; 
Environmental benefits rating: Medium; 
Operating efficiency rating: Medium; 
Cost-effectiveness rating: Medium-high; 
Land use rating: Medium. 

Source: FTA’s New Starts report for fiscal years 2002 and 2003. 

[End of table] 

As table 1 shows, one of the four proposed projects received a highly 
recommended rating on the basis of its strong cost-effectiveness 
rating, good mobility improvement rating, and a demonstrated local 
financial commitment to build and operate the project. The proposed 
San Diego (Oceanside-Escondido Rail Corridor) project received a 
medium-high rating in mobility improvement because it is expected to 
serve 15,100 average weekday boardings in 2015, and 8,600 new daily 
riders. According to FTA, it will also help to eliminate the heavy 
congestion of northern San Diego County along the Route 78 corridor, 
saving 700,000 hours of travel time a year compared to the TSM 
alternative. In addition, according to FTA, the high ratings for the 
proposed project’s capital and operating financing plans reflect the 
solid financial condition of the transit agency and the other funding 
partners, as well as the sufficient projected revenue growth and 
contingencies. 

The other three projects proposed for grant agreements received overall 
ratings of recommended. All were rated medium or medium-high on the 
project justification and local financial commitment criteria. For 
instance, the New Orleans (Canal Street Spine) project’s recommended 
rating was based on its strong cost-effectiveness rating and 
demonstrated local financial commitment. According to FTA’s New Starts 
report, the transit agency has committed 100 percent of its local 
capital and operating funds through funding sources such as a loan 
that would be paid back by a new sales tax on hotels and motels. In 
contrast, the sponsor of another project that was not recommended for 
funding in 2003 has been unable to designate specific capital funds or 
identify specific revenue sources for operating the proposed project. 
The New Orleans (Canal Street Spine) project’s strong financial rating 
also reflects FTA’s favorable assessment of the transit agency’s 
action to reduce recent deficits through fare increases, tax 
increases, and use of leases for new buses. 

Twenty-five other New Starts projects received highly recommended or 
recommended ratings but were not proposed for grant agreements. Two of 
these projects, San Diego (Mid-Coast Corridor) and Charlotte (South 
Corridor LRT), received highly recommended ratings based on their 
strong cost-effectiveness, transit-supportive land-use, and local 
financial commitment ratings but were not proposed for funding. 
Charlotte did not meet FTA’s “readiness” test. FTA officials told us 
that the San Diego (Mid-Coast) project met FTA’s evaluation and rating 
criteria as well as its readiness test but was not selected because 
completing the San Diego (Mission Valley East LRT) extension (an 
ongoing project) is the transit authority’s top priority, and FTA 
officials believe that the authority may not have the financial 
capacity to fund both projects at this time. The other 23 projects 
were rated overall as recommended. Many of these projects were not 
proposed for grant agreements in fiscal year 2003 because they are in 
the early stages of development and are not ready for final design or 
construction. 

Finally, FTA rated four proposed projects as not recommended primarily 
because of low local financial commitment summary ratings due to the 
lack of committed local funding to build and operate the systems or 
the lack of clearly defined cost estimates and contingencies. For 
instance, one of the four projects received low ratings for the 
stability and reliability of its capital and operating finance plans, 
reflecting FTA’s concern about the large share of uncommitted and/or 
unidentified local funding, and the absence of an operating plan. 
Other reasons for receiving a not recommended rating include a lack of 
demonstrated progress since last year’s rating, the relatively high 
level of New Starts funding proposed, and the reliance on the passage 
of a sales tax referendum for a portion of the local share. 

FTA Ends TEA-21 Authorization Period with Unused Commitment Authority: 

Implementing FTA’s New Starts report and budget proposal for fiscal 
year 2003 would leave FTA with about $310 million in unused commitment 
authority. Although FTA has been faced with an impending transit budget 
crunch for several years, the agency would end the TEA-21 authorization 
period with unused commitment authority for several reasons. First, the 
Congress in fiscal year 2001 substantially increased FTA’s authority 
to make contingent commitments, subject to future authorizations and 
appropriations. Second, to preserve commitment authority for future 
projects, FTA did not request any funding for preliminary engineering 
activities in the fiscal year 2002 and 2003 budget proposals—a routine 
practice in prior years. Third, in determining which projects are 
ready for a grant agreement, FTA has applied stricter tests for 
readiness and technical capacity. As a result, fewer projects than 
expected were recommended for New Starts funding for 2002 and 2003. 
For instance, only 2 of the 14 projects that FTA estimated last year 
would be ready for grant agreements in fiscal year 2003 are being 
proposed for funding commitments. Finally, about half of the unused 
commitment authority results from FTA’s response to the recommendation 
in our August 2001 report to release $157 million in commitment 
authority reserved for a Los Angeles subway project for which the 
federal funding commitment had been withdrawn. 

Record Amounts Provided for New Starts Program: 

FTA was authorized to make a record level of funding commitments—-
about $10 billion—-for the New Starts program from 1998 through 2003. 
TEA-21 provided the majority of FTA’s commitment authority, authorizing 
$6.09 billion in “guaranteed” funding for the New Starts program. In 
addition, TEA-21 and the Department of Transportation’s Appropriation 
Act for fiscal year 2001 authorized FTA to make an additional $3.4 
billion in contingent commitments, subject to future authorizations and 
appropriations. Contingent commitment authority is designed to allow 
FTA to execute grant agreements that extend beyond the 6-year period of 
TEA-21. TEA-21 authorized contingent commitments in an amount 
equivalent to the last two years of “guaranteed” funding authorized by 
the act. The fiscal year 2001 appropriations act increased FTA’s 
contingent commitment authority to an amount equivalent to the last 3 
fiscal years of funding. According to FTA officials, after accounting 
for required projects for Dulles, Chicago, and Minneapolis, this “
extra year” of contingent commitment authority provided FTA with about 
$500 million beyond that provided by TEA-21 that could be used to fund 
additional projects. 

According to FTA, it has already committed approximately $8.9 billion 
for New Starts projects and program activities. Specifically, about 
$7.2 billion is committed to the 25[Footnote 23] projects with 
existing grant agreements.[Footnote 24] After accounting for other 
requirements (such as the cost of project management oversight), which 
are expected to total about $1.7 billion, about $1.1 billion remains 
for new grant agreements in fiscal year 2003. (Table 2 summarizes 
FTA’s commitment authority and funding commitments, as of March 2002.) 

Table 2: FTA’s New Starts Commitment Authority and Funding 
Commitments, March, 2002: 

Commitment authority: 

TEA-21: 
Amount: $6.092 billion. 

Contingent commitment authority: 
Amount: $3.409 billion. 

Commitment authority for Bay Area Rapid Transit (BART)[A]: 
Amount: $453.56 million. 

Other[B]: 
Amount: $35.99 million. 

Total commitment authority: 
Amount: $9.991.15 billion. 

Funding commitments: 

ISTEA FFGAs: 
Amount: ($3.087 billion). 

TEA-21 FFGAs: 
Amount: ($4.151 billion). 

Project management oversight: 
Amount: ($48.15 million) 

Mandated projects[C]: 
Amount: ($468.42). 

Other[D]: 
Amount: ($1.142 billion). 

Total funding commitments: 
Amount: ($8.896 billion). 

Remaining commitment authority: 
Amount: $1.095 billion 

Note: Numbers do not add due to rounding. 

[A] ISTEA provided $272.95 million of commitment authority for BART 
and the fiscal year 2001 DOT appropriations act provided an additional 
$180.61 million. 

[B] Includes reallocated funds from unobligated balances of fiscal 
year 2000 appropriations ($26.99 million), $4 million in 
appropriations beyond the “guaranteed” authorization in fiscal year 
2001, and $5 million in appropriations from P.L. 106-246. 

[C] Includes congressionally mandated capital projects for Alaska, 
Hawaii, Chicago, and Dulles. 

[D] Includes all project costs not covered by grant agreements, such 
as preliminary engineering costs. 

Source: FTA. 

[End of table] 

Implementing FTA’s New Starts report and budget proposal for fiscal 
year 2003 would leave FTA with about $310 million in unused commitment 
authority. The budget proposes $55 million for two new projects and 
$79.1 million for the two projects with pending grant agreements for 
fiscal year 2003. However, the $134.1 million requested for these 
projects for 2003 will only be a “down payment” on what would amount 
to a total federal commitment of $785 million[Footnote 25] for these 
four projects over the next several years, if no changes were made to 
the current project proposals. This amount also includes $27 million 
for four meritorious projects without grant agreements, as well as a 
fifth project that was mandated by the Congress in fiscal year 2001 
with funding of $4 million. Therefore, FTA ends the TEA-21 
authorization period with $310 million in unused commitment authority. 

To preserve commitment authority, FTA did not request any funding for 
preliminary engineering activities in the fiscal year 2002 and 2003 
budgets.[Footnote 26] According to FTA, it has provided an average of 
$150 million a year from fiscal year 1998 through fiscal year 2001 for 
projects’ preliminary engineering activities. However, FTA did not 
recommend any funds for preliminary engineering activities in fiscal 
years 2002 and 2003. According to a senior FTA official, this approach 
allowed the agency to conserve funds for existing and new grant 
agreements and ensured that funds were only provided to projects that 
were ready to move forward. The official further noted that projects 
may use other federal funding for preliminary engineering activities 
and no project should be negatively impacted if New Starts funding was 
not provided for these activities in 2002 and 2003. Officials from 
several transit projects in the preliminary engineering phase that we 
contacted in 2001 indicated that they would use other federal funds 
and/or state and local funds to pay for their preliminary engineering 
work. 

Fewer Projects Than Anticipated Receive Grant Agreements: 

More state and local transit agencies than ever are competing for New 
Starts funds. However, FTA’s stricter tests for readiness and technical 
capacity resulted in fewer projects that were ready for a grant 
agreement and thus recommended for funding for 2002 and 2003. As 
mentioned earlier, FTA uses a number of milestones to determine 
whether a project is sufficiently developed to be considered for a 
grant agreement. For example, FTA determines whether the necessary 
real estate has been acquired, utility arrangements have been made, 
and local funding sources are in place. According to an FTA official, 
this ensures that there are no red flags signaling that the project 
has outstanding issues it must address. For instance, only 2 of the 14 
projects that FTA estimated last year would be in or ready to enter 
the final design phase at the end of fiscal year 2002—-signaling that 
they were ready to execute a grant agreement-—are being proposed for 
funding commitments in fiscal year 2003. Several of these projects 
have not yet been approved to enter the final design phase. Like the 
approval to enter preliminary engineering, FTA reviews the project’s 
costs, benefits, and impacts under the project evaluation criteria to 
determine when a project is ready to enter the final design phase. 

FTA identified five meritorious projects that it is recommending for 
$31 million in funding in fiscal year 2003 to continue their 
development.[Footnote 27] These projects have met the planning 
requirements of the New Starts program and have strong local financial 
commitments. However, they all have outstanding issues, such as 
environmental and financing concerns, which prevented them from 
passing FTA’s readiness test. For instance, one project must resolve 
technology issues that relate to bus rapid transit buses—60-foot 
hybrid-electric buses with left and right side doors for access. 
Another project is addressing historic preservation issues related to 
several stations that would be reconstructed as part of the project. 
Finally, the scale of one project requires further work before a 
federal commitment can be made. The project is too large (estimated 
total project cost of $4.4 billion) for the normal minimum operable 
segment concept on which a grant agreement is based to work and is 
expected to require funding over several authorization periods. 
According to a senior FTA official, the project’s sponsors and FTA 
need to determine how to resolve this issue and proceed forward. 

In addition, the timing and magnitude of individual New Starts projects 
dictates how much commitment authority is available for future 
projects. For example, the total New Starts share for the five 
meritorious projects is about $2.8 billion. If one or two of these 
projects had matured faster and been ready for a grant agreement, FTA 
would have essentially exhausted its commitment authority. A senior 
FTA official acknowledged that it would have been “a very different 
ball game” if more projects had been ready for a grant agreement this 
year or if one large project, such as New York (Long Island Railroad 
East Side Access)—with a New Starts share of $2.2 billion—had matured 
faster. 

Finally, FTA recently increased its available commitment authority by 
$157 million by releasing amounts associated with a project for which 
the federal funding commitment had been withdrawn. As of August 2001, 
FTA had reserved $647 million in commitment authority for a New Starts 
project in Los Angeles. At that time, we reported that two segments of 
that project had been suspended for over 3 years and that FTA had 
informed the project sponsors that it no longer had funding 
commitments for these segments. We also stated that releasing the 
commitment authority attributable to projects for which the federal 
funding commitment had been withdrawn would significantly increase FTA’
s flexibility to execute grant agreements for additional projects. 
Therefore, we recommended that FTA adopt the practice of releasing 
such commitment authority and, specifically, that it release the $647 
million reserved for the two segments of the Los Angeles project. 
[Footnote 28] In its New Starts report and budget proposal for fiscal 
year 2003, FTA has proposed a funding commitment for one of the 
previously suspended segments (Eastside); however, because the other 
suspended segment (Mid-City) is not a candidate for a funding 
commitment at this time, FTA has released the associated commitment 
authority, increasing its available commitment authority by $157 
million.[Footnote 29] 

Proposals to Cap New Starts Funding May Bring Mixed Results: 

Since the potential demand for New Starts funding is extremely high, 
the administration and others have proposed limiting the amount of New 
Starts funds to less than the authorized 80 percent share. A cap on 
New Starts funds would allow more projects to receive funding but 
could have an effect on specific projects that are currently being 
developed. For example, based on current project cost estimates, a 60-
percent cap on New Starts funds for the 49 projects currently in final 
design or preliminary engineering would result in about $500 million 
that could be used to fund additional projects.[Footnote 30] Two 
projects that currently have a New Starts share at 80 percent, account 
for the majority of funds that could be redirected. According to 
officials from several transit agencies, the impact of a proposed cap 
on individual projects would vary. Some projects would be able to make 
up for the reduced New Starts funding while others would not be able 
to tap into any other funding sources and would have to modify their 
projects’ scope or schedule or even terminate them. Finally, several 
officials from MPOs pointed out that limiting the New Starts funding 
share to 50 or 60 percent could have an affect on the transportation 
decisionmaking process. Specifically, officials from several MPOs 
stated that a cap on New Starts funds could influence their selection 
of highway over transit projects since the decisions are often 
affected by the availability of funds from various federal programs 
and which projects will receive the highest federal share. 

Several Proposals Would Limit New Starts Funding: 

In order to manage the increasing demand for New Starts funding, there 
have been several proposals to limit the amount of New Starts funds 
that could be applied to a project. For instance, the president’s 
fiscal year 2002 budget recommended that New Starts funding be limited 
to 50 percent of project costs starting in fiscal year 2004. [Footnote 
31] (Currently, New Starts funding—-and all federal funding-—is capped 
at 80 percent.) 

In addition, the conference report that accompanied the fiscal year 
2002 Department of Transportation appropriations act directs FTA not 
to sign any new full funding grant agreement after September 30, 2002, 
that has a maximum federal share higher than 60 percent. According to 
FTA, these proposals are consistent with its recent practice of 
seeking a local share of more than 20 percent in order to manage the 
increasing demand for New Starts funding.[Footnote 32] 

FTA officials told us that limiting the New Starts funding to 50 or 60 
percent would ensure that local governments play a major role in 
funding New Starts projects. Under such a cap, local governments will 
need to decide to apply either other federal funds or local funds to 
proposed New Starts projects based on their priorities. An FTA 
official also pointed out that a 50 or 60 percent cap would allow more 
projects to receive New Starts funding; however, the official 
acknowledged that limiting New Starts funding may prevent some 
projects from being developed or moving forward because of limited 
local funding. 

Additional Projects Could Be Funded with A Cap: 

Lowering the share to 50 or 60 percent may provide an opportunity to 
spread available New Starts funds more widely. In the last 10 years, 
the New Starts share for projects with a grant agreement has averaged 
around 50 percent and has been trending lower. For the 18 grant 
agreements signed between October 1999 and November 2001, the overall 
New Starts share was 46 percent, somewhat below the 56 percent average 
share of grant agreements signed in 1992-1997.[Footnote 33] For 
individual projects, the New Starts share has varied considerably from 
the mean—from a low of 19 percent to a high of 80 percent. If the 18 
grant agreements signed in the 1999-2002 timeframe had been capped at 
60 percent, $4.05 billion of New Starts funding would have been 
committed to these projects instead of $4.30 billion (a difference of 
about $250 million). With a 50-percent cap, the New Starts commitment 
would have totaled $3.65 billion (a difference of about $650 million). 

A cap on New Starts funds for the 49 projects currently in final 
design or preliminary engineering would have a much greater effect. 
These 49 projects are currently proposing $20.59 billion in New Starts 
funding. A 60-percent cap would result in about $500 million that 
could be used to fund additional projects; a 50-percent cap would 
result in slightly over $1 billion that could be allocated to other 
projects. Two projects (Philadelphia Schuylkill Valley MetroRail and 
San Juan Tren Urbano Minillas Extension), that currently have a New 
Starts share at 80 percent, account for the majority of funds that 
could be redirected—85 percent of the $500 million and 61 percent of 
the $1 billion. According to FTA officials, the proposed projects’ 
local share and percentage of New Starts funds could change as the 
projects proceed through the final design stage. 

Many of the project sponsors that initially proposed a New Starts 
share of over 50 percent have responded to FTA’s suggestion to lower 
their planned New Starts funding in order to be competitive with other 
projects. For example, several projects have adjusted their financial 
plans for fiscal year 2003 to reflect a decrease in the New Starts 
share of their total cost. Seven projects that initially proposed New 
Starts shares from 63 percent to 80 percent in fiscal year 2002 
lowered them this year to between 32 percent and 60 percent. Several 
project officials told us that they lowered their New Starts proposals 
to become more competitive in response to FTA’s suggestions. 

A Cap on New Starts Funds Could Affect Specific Projects and the 
Planning Process: 

The proposed caps could affect a number of projects currently being 
developed. For example, 10 of the 49 projects that are currently in 
the final design or preliminary engineering stages plan to use New 
Starts funds to pay for over 60 percent of their total costs; an 
additional 9 projects plan to use over 50 percent (appendix II 
provides a list of the 19 projects). The projected use of New Starts 
funds for these 19 projects ranges from 51 percent for Little Rock 
(River Rail Project) to 80 percent for Galveston (Trolley Extension), 
Nashville (East Corridor Commuter Rail Project), Alaska (Knik River to 
Wasilla Track Improvements), Philadelphia (Schuylkill Valley 
MetroRail) and San Juan (Tren Urbano Minillas Extension). According to 
officials from several of these transit agencies, the impact of a 
proposed cap would vary. For example, officials from several projects 
stated that their projects’ scope or schedule would have to be 
modified or even terminated because they may not be able to tap into 
any other funding sources to account for lower than planned New Starts 
funding. An official from one project added that a change in the 
project’s scope would also have a negative impact on service, 
ridership, and overall cost-effectiveness. In contrast, officials from 
several projects indicated that their projects would continue as 
planned because they would seek other federal or local funds to make 
up for reduced New Starts funding. For example, an official from one 
project stated that, if necessary, it would issue bonds to offset any 
shortfall in New Starts funding. 

Any decision to make up the difference with additional federal or local 
funds could affect other local transportation projects. For example, 
officials from several projects stated that providing additional funds 
to their New Starts projects would most likely result in other 
projects in the area receiving less funds, being delayed, or 
terminated. An official from one project stated that redirecting funds 
from highway or other transit projects would indefinitely delay these 
projects until additional funding is available. However, according to 
several project officials, obtaining additional funding could be 
difficult since many states and localities are currently facing 
significant budget deficits or funding shortfalls. Several project 
officials noted that a cap could mean that localities would have to 
reevaluate the priority of transportation projects, including New 
Starts projects, in the area and make difficult decisions such as 
delaying or even terminating projects until the local share is raised. 
Finally, officials from several projects noted that the cap would have 
a greater impact on areas trying to develop a first time, fixed-
guideway or bus rapid transit system where the benefits of the system 
have not yet been proven. 

Finally, a cap could also affect the transportation decisionmaking 
process. For example, several of the MPOs we contacted told us that 
they are concerned that having a New Starts match for transit capital 
projects that is lower than the match for highway capital projects 
could affect balanced transportation decisionmaking and create a bias 
towards highway projects. In addition, according to some MPOs, a cap 
on the New Starts share could also influence the planning and 
selection of transportation projects in their city or state’s long-
range plan. For example, one official indicated that his area’s long-
range plan would probably move towards more highway investments. 
Another official pointed out that a cap could severely hamper the region
’s ability to construct the new transit projects in its long-range 
plan, thus endangering its air quality conformity status. In contrast, 
some MPOs indicated that their regions prefer a multi-modal system and 
the types of projects selected for such plans may not be impacted by a 
cap on New Starts funds. 

Concluding Observations: 

Although FTA has been faced with an impending transit budget crunch for 
several years, the agency will end the TEA-21 authorization period with 
unused commitment authority impart because fewer projects than 
expected were ready for grant agreements. FTA proposes projects for 
funding after they have met its readiness test. However, in the last 
several years only nine projects were determined to be ready and were 
proposed for New Starts funding commitments. Given the tremendous 
pipeline, if more projects (or a few large ones) had matured faster 
FTA would have been forced to make difficult funding decisions. If 
this were to occur in the future, FTA may have a difficult time making 
these decisions because it has not adopted our recommendation made in 
2000[Footnote 34] to develop a process for further prioritizing among 
the projects it rates as recommended or higher. Such a process would 
ensure that the “best” projects receive New Starts funding and allow 
for a better understanding of why certain projects with similar 
ratings may receive funding while others do not. Finally, if many 
projects are ready at the same time for a grant agreement, FTA may also 
have to adopt an ongoing practice of releasing the funding set aside 
for projects when the federal funding commitments have been withdrawn. 

A cap on New Starts funds could allow more projects to receive funding 
if a significant number of projects are ready for a grant agreement at 
the same time. Since FTA is ending the TEA-21 authorization period 
with unused commitment authority, a cap imposed over the last several 
years would not have resulted in funding additional projects. In 
addition, a cap could have a negative impact on specific projects that 
are currently being developed as well as the transportation 
decisionmaking process. 

Agency Comments: 

We provided the Department of Transportation with a draft of this 
report for review and comment. FTA provided some technical comments on 
the draft, which we have incorporated where appropriate. 

Scope and Methodology: 

To address the issues discussed in this report, we reviewed the 
legislation governing New Starts transit projects, FTA’s annual New 
Starts reports for fiscal years 2002 and 2003, the new regulations for 
New Starts transit projects, and documents related to New Starts 
funding. We also interviewed appropriate FTA headquarters officials, 
22 officials from transit agencies with New Starts projects currently 
in the final design or preliminary engineering phases, and officials 
from selected MPOs (see appendix III for a complete list of projects 
and MPOs contacted). We performed our work in accordance with 
generally accepted government auditing standards from February through 
April 2002. 

We are sending copies of this report to the secretary of 
Transportation, the administrator of the Federal Transit 
Administration, the director of the Office of Management and Budget, 
and other interested parties. We will make copies available to others 
upon request. 

If you have questions regarding this report, please contact me or Susan 
Fleming on (202) 512-4431 or at flemings@gao.gov. Key contributors to 
this report were Heather Balent, Helen Desaulniers, Susan Fleming, and 
Rod Moore. 

Signed by: 

JayEtta Z. Hecker: 
Director, Physical Infrastructure Issues: 

[End of section] 

Appendix I: FTA’s Fiscal Year 2003 New Starts Ratings and Funding 
Recommendations: 

Existing full funding grant agreements[A]: 

Location/project: Atlanta – North Springs; 
Overall project rating: FFGA; 
FY 2003 recommended funding: $16.11 million. 

Location/project: Baltimore – Central LRT Double-Tracking; 
Overall project rating: FFGA; 
FY 2003 recommended funding: $24.25 million. 

Location/project: Boston – South Boston Piers Transitway (Phase I); 
Overall project rating: FFGA; 
FY 2003 recommended funding: $0.68 million. 

Location/project: Chicago – Douglas Branch Reconstruction; 
Overall project rating: FFGA; 
FY 2003 recommended funding: $55.00 million. 

Location/project: Chicago – Metra North Central Commuter Rail; 
Overall project rating: FFGA; 
FY 2003 recommended funding: $20.00 million. 

Location/project: Chicago – Metra South West Corridor Commuter Rail; 
Overall project rating: FFGA; 
FY 2003 recommended funding: $20.00 million. 

Location/project: Chicago – Metra Union Pacific West Line Extension; 
Overall project rating: FFGA; 
FY 2003 recommended funding: $12.00 million. 

Location/project: Dallas – North Central LRT Extension; 
Overall project rating: FFGA 
FY 2003 recommended funding: $70.00 million. 

Location/project: Denver – Southeast Corridor LRT; 
Overall project rating: FFGA; 
FY 2003 recommended funding: $70.00 million. 

Location/project: Ft. Lauderdale – Tri-Rail Commuter Rail Upgrades; 
Overall project rating: FFGA; 
FY 2003 recommended funding: $39.69 million. 

Location/project: Los Angeles – MOS-3 North Hollywood; 
Overall project rating: FFGA; 
FY 2003 recommended funding: $40.49 million. 

Location/project: Memphis – Medical Center Extension; 
Overall project rating: FFGA; 
FY 2003 recommended funding: $15.61 million. 

Location/project: Minneapolis – Hiawatha Corridor LRT; 
Overall project rating: FFGA; 
FY 2003 recommended funding: $60.00 million. 

Location/project: Northern New Jersey – Hudson-Bergen LRT (MOS-1); 
Overall project rating: FFGA; 
FY 2003 recommended funding: $19.20 million. 

Location/project: Northern New Jersey – Hudson-Bergen (MOS-2); 
Overall project rating: FFGA; 
FY 2003 recommended funding: $50.00 million. 

Location/project: Northern New Jersey – Newark Rail Link (MOS-1); 
Overall project rating: FFGA; 
FY 2003 recommended funding: $60.00 million. 

Location/project: Pittsburgh – Stage II LRT Reconstruction; 
Overall project rating: FFGA; 
FY 2003 recommended funding: $26.25 million. 

Location/project: Portland – Interstate MAX LRT Extension; 
Overall project rating: FFGA; 
FY 2003 recommended funding: $70.00 million. 

Location/project: St. Louis – Metrolink St. Clair Extension; 
Overall project rating: FFGA; 
FY 2003 recommended funding: $3.37 million. 

Location/project: Salt Lake City – CBD to University LRT; 
Overall project rating: FFGA; 
FY 2003 recommended funding: $68.76 million. 

Location/project: Salt Lake City – North-South LRT; 
Overall project rating: FFGA; 
FY 2003 recommended funding: $0.72 million. 

Location/project: San Diego – Mission Valley East LRT Extension; 
Overall project rating: FFGA; 
FY 2003 recommended funding: $65.00 million. 

Location/project: San Francisco – BART Extension to Airport; 
Overall project rating: FFGA; 
FY 2003 recommended funding: $100.00 million. 

Location/project: San Juan – Tren Urbano; 
Overall project rating: FFGA; 
FY 2003 recommended funding: $59.74 million. 

Location/project: Washington, DC/MD – Largo Extension; 
Overall project rating: FFGA; 
FY 2003 recommended funding: $60.00 million. 

Subtotal: 
FY 2003 recommended funding: $1.027 billion. 

Proposed full funding grant agreements: 

Location/project: Los Angeles – Eastside Corridor LRT; 
Overall project rating: Recommended; 
FY 2003 recommended funding: $35.00 million. 

Location/project: New Orleans – Canal Street[B]; 
Overall project rating: Recommended; 
FY 2003 recommended funding: $37.10 million. 

Location/project: San Diego – Oceanside-Escondido Rail Corridor[B]; 
Overall project rating: Highly recommended; 
FY 2003 recommended funding: $42.00 million. 

Location/project: Salt Lake City – Medical Center Extension LRT; 
Overall project rating: Recommended; 
FY 2003 recommended funding: $20.00 million. 

Subtotal: 
FY 2003 recommended funding: $134.10 million. 

Proposed other project funding commitments: 

Location/project: Chicago – Ravenswood Line Expansion; 
Overall project rating: Recommended; 
FY 2003 recommended funding: $4.00 million. 

Location/project: Cleveland – Euclid Corridor Transportation Project; 
Overall project rating: Recommended; 
FY 2003 recommended funding: $4.00 million. 

Location/project: Las Vegas – Resort Corridor Fixed Guideway; 
Overall project rating: Recommended; 
FY 2003 recommended funding: $4.00 million. 

Location/project: Minneapolis – Northstar Commuter Rail; 
Overall project rating: Recommended; 
FY 2003 recommended funding: $4.00 million. 

Location/project: New York – Long Island Railroad East Side Access; 
Overall project rating: Recommended; 
FY 2003 recommended funding: $15.00 million. 

Subtotal: 
FY 2003 recommended funding: $ 31.00 million. 

Projects in final design: 

Location/project: Alaska Marine Highway System; 
Overall project rating: Exempt[C]; 
FY 2003 recommended funding: $0.00. 

Alaska Railroad – South Anchorage Double Track; 
Overall project rating: Exempt[C]; 
FY 2003 recommended funding: $0.00. 

Location/project: Alaska Railroad – Knik River to Wasilla Track; 
Improvements 
Overall project rating: Exempt[C]; 
FY 2003 recommended funding: $0.00. 

Location/project: Galveston – Trolley Extension; 
Overall project rating: Exempt[C]; 
FY 2003 recommended funding: $0.00. 

Location/project: Little Rock – River Rail Project; 
Overall project rating: Exempt[C]; 
FY 2003 recommended funding: $0.00. 

Location/project: Los Angeles – San Diego – LOSSAN Rail Corridor 
Improvement; 
Overall project rating: Exempt[C]; 
FY 2003 recommended funding: $0.00. 

Location/project: Nashville – East Corridor Commuter Rail; 
Overall project rating: Exempt[C]; 
FY 2003 recommended funding: $0.00. 

Location/project: Pawtucket, RI – Commuter Rail Improvement Program; 
Overall project rating: Exempt[C]; 
FY 2003 recommended funding: $0.00. 

Location/project: San Francisco – Third Street Light Rail (Phase I); 
Overall project rating: Exempt[C]; 
FY 2003 recommended funding: $0.00. 

Location/project: Seattle – Central Link Initial Segment; 
Overall project rating: Recommended; 
FY 2003 recommended funding: $0.00. 

Subtotal: 
FY 2003 recommended funding: $0.00. 

Projects in preliminary engineering: 

Location/project: Austin – Austin Area LRT System[D]; 
Overall project rating: Not rated; 
FY 2003 recommended funding: $0.00. 

Location/project: Bridgeport, CT – Intermodal Center; 
Overall project rating: Exempt[C]; 
FY 2003 recommended funding: $0.00. 

Location/project: Charlotte – South Corridor LRT; 
Overall project rating: Highly recommended; 
FY 2003 recommended funding: $0.00. 

Location/project: Cincinnati – I-71 Corridor; 
Overall project rating: Not recommended; 
FY 2003 recommended funding: $0.00. 

Location/project: Columbus – North Corridor; 
Overall project rating: Recommended; 
FY 2003 recommended funding: $0.00. 

Location/project: Dallas – Northwest-Southeast Corridor LRT MOS; 
Overall project rating: Recommended; 
FY 2003 recommended funding: $0.00. 

Location/project: Denver – West Corrido LRT; 
Overall project rating: Recommended; 
FY 2003 recommended funding: $0.00. 

Location/project: Fort Collins, CO – Mason Street Transportation 
Corridor; 
Overall project rating: Recommended 
FY 2003 recommended funding: $0.00. 

Location/project: Hartford – New Britain-Hartford Busway; 
Overall project rating: Recommended; 
FY 2003 recommended funding: $0.00. 

Location/project: Honolulu – Primary Transportation Corridor Project; 
Overall project rating: Recommended; 
FY 2003 recommended funding: $0.00. 

Location/project: Kansas City, Johnson County–I-35 Commuter Rail; 
Overall project rating: Exempt[C]; 
FY 2003 recommended funding: $0.00. 

Location/project: Los Angeles – Mid-City Exposition LRT; 
Overall project rating: Recommended; 
FY 2003 recommended funding: $0.00. 

Location/project: Los Angeles – San Fernando Valley East-West Transit 
Corridor; 
Overall project rating: Recommended; 
FY 2003 recommended funding: $0.00. 

Location/project: Louisville – South Central Corridor LRT; 
Overall project rating: Recommended; 
FY 2003 recommended funding: $0.00. 

Location/project: Lowell, MA-Nashua, NH – Commuter Rail; 
Overall project rating: Exempt[C]; 
FY 2003 recommended funding: $0.00. 

Location/project: Maryland – MARC Commuter Rail Improvements; 
Overall project rating: Exempt[C]; 
FY 2003 recommended funding: $0.00. 

Location/project: Miami – North 27th Avenue; 
Overall project rating: Not recommended; 
FY 2003 recommended funding: $0.00. 

Location/project: New Orleans – Desire Corridor Streetcar; 
Overall project rating: Recommended; 
FY 2003 recommended funding: $0.00. 

Location/project: New York – Second Avenue Subway; 
Overall project rating: Recommended; 
FY 2003 recommended funding: $0.00. 

Location/project: Orange County, CA – Centerline LRT Project; 
Overall project rating: Recommended; 
FY 2003 recommended funding: $0.00. 

Location/project: Philadelphia – Schuylkill Valley Metrorail; 
Overall project rating: Recommended; 
FY 2003 recommended funding: $0.00. 

Location/project: Phoenix/Central Phoenix – East Valley Corridor; 
Overall project rating: Recommended; 
FY 2003 recommended funding: $0.00. 

Location/project: Pittsburgh – North Shore Connector LRT; 
Overall project rating: Recommended; 
FY 2003 recommended funding: $0.00. 

Location/project: Raleigh – Regional Transit Plan (Phase I); 
Overall project rating: Recommended; 
FY 2003 recommended funding: $0.00. 

Location/project: San Diego – Mid-Coast Corridor; 
Overall project rating: Highly recommended; 
FY 2003 recommended funding: $0.00. 

Location/project: San Juan – Tren Urbano Minillas Extension; 
Overall project rating: Not recommended; 
FY 2003 recommended funding: $0.00. 

Location/project: Seattle – Everett to Seattle Commuter Rail; 
Overall project rating: Exempt[C]; 
FY 2003 recommended funding: $0.00. 

Location/project: Seattle – Link Extension and North Link; 
Overall project rating: Not rated[D]; 
FY 2003 recommended funding: $0.00. 

Location/project: Seattle-Tacoma – Lakewood to Tacoma Commuter Rail; 
Overall project rating: Exempt[C]; 
FY 2003 recommended funding: $0.00. 

Location/project: Stamford, CT – Urban Transitway and Intermodal 
Transportation Center Improvements; 
Overall project rating: Exempt[C]; 
FY 2003 recommended funding: $0.00. 

Location/project: Tampa – Tampa Bay Regional Rail System; 
Overall project rating: Not recommended; 
FY 2003 recommended funding: $0.00. 

Location/project: Washington County, OR – Wilsonville-Beaverton 
Commuter Rail; 
Overall project rating: Exempt[C]; 
FY 2003 recommended funding: $0.00. 

Location/project: Washington, D.C. – Dulles Corridor Bus Rapid Transit; 
Overall project rating: Recommended; 
FY 2003 recommended funding: $0.00. 

Subtotal: 
FY 2003 recommended funding: $0.00. 

Other: 

Location/project: Ferry Capital Projects in Alaska or Hawaii; 
FY 2003 recommended funding: $10.30 million. 

Location/project: Project management oversight; 
FY 2003 recommended funding: $12.14 million. 

Subtotal: 
FY 2003 recommended funding: $22.44 million. 

Grand total: 
FY 2003 recommended funding: $1.214 billion. 

Note: Figures may not add to totals because of rounding. 

[A] Projects with FFGAs were not rated because FTA had found the 
projects to be justified and to have adequate local financial 
commitments at the time the FFGAs were issued. These projects are being 
recommended to receive the fiscal year 2003 amount committed by the 
FFGA. 

[B] The ratings for New Orleans (Canal Street Spine) and San Diego 
(Oceanside-Escondido Rail Corridor) are the ratings they received for 
fiscal year 2002. According to FTA, these ratings are still valid. 

[C] Projects rated “exempt” (17) were not rated because an exemption 
is granted to projects when the anticipated New Starts share of the 
total estimated capital cost is $25 million or less. 

[D] Projects rated “not rated” (2) were not rated because insufficient 
information precluded a complete evaluation of these projects. 

Source: FTA’s New Starts report for fiscal years 2002 and 2003. 

[End of table] 

[End of section] 

Appendix II: Projects Proposing a New Starts Share of Over 50 Percent: 

Final design: 

Project: Alaska Railroad (Knik River to Wasilla Track Improvements); 
Total cost: $11.3 million; 
New Starts share: $9.0 million; 
New Starts share of total cost: 80%. 

Project: Galveston ( Trolley Extension); 
Total cost: $10.1 million; 
New Starts share: $8.1 million; 
New Starts share of total cost: 80%. 

Project: Little Rock (River Rail Project); 
Total cost: $17.6 million; 
New Starts share: $9.0 million; 
New Starts share of total cost: 51%. 

Project: Los Angeles-San Diego (LOSSAN Rail Corridor Improvements); 
Total cost: $35.7 million; 
New Starts share: $24.1 million; 
New Starts share of total cost: 68%. 

Project: Nashville (East Corridor Commuter Rail); 
Total cost: $28.7 million; 
New Starts share: $23.0 million; 
New Starts share of total cost: 80%. 

Project: Pawtucket, RI (Commuter Rail Improvement Program); 
Total cost: $18.5 million; 
New Starts share: $10.0 million; 
New Starts share of total cost: 54%. 

Project: Salt Lake City (Medical Center Extension LRT); 
Total cost: $90.0 million; 
New Starts share: $54.0 million; 
New Starts share of total cost: 60%. 

Preliminary engineering: 

Project: Chicago (Ravenswood Line Expansion); 
Total cost: $476.0 million; 
New Starts share: $245.6 million; 
New Starts share of total cost: 52%. 

Project: Cleveland (Euclid Corridor Transportation Project); 
Total cost: $220.4 million; 
New Starts share: $135.0 million; 
New Starts share of total cost: 61%. 

Project: Denver (West Corridor LRT); 
Total cost: $624.3 million; 
New Starts share: $366.3 million; 
New Starts share of total cost: 59%. 

Project: Fort Collins, CO (Mason Street Transportation Corridor); 
Total cost: $66.0 million; 
New Starts share: $52.3 million; 
New Starts share of total cost: 79%. 

Project: Los Angeles (Eastside Corridor LRT); 
Total cost: $817.9 million; 
New Starts share: $490.7 million; 
New Starts share of total cost: 60%. 

Project: Louisville (South Central Corridor LRT); 
Total cost: $671.2 million; 
New Starts share: $380.2 million; 
New Starts share of total cost: 57%. 

Project: Miami (North 27th Avenue); 
Total cost: $87.9 million; 
New Starts share: $61.5 million; 
New Starts share of total cost: 70%. 

Project: New Orleans (Desire Corridor Streetcar); 
Total cost: $93.5 million; 
New Starts share: $56.1 million; 
New Starts share of total cost: 60%. 

Project: Philadelphia (Schuylkill Valley MetroRail); 
Total cost: $1,531.4 million; 
New Starts share: $1,225.1 million; 
New Starts share of total cost: 80%. 

Project: Pittsburgh (North Shore Connector LRT); 
Total cost: $389.9 million; 
New Starts share: $272.9 million; 
New Starts share of total cost: 70%. 

Project: San Juan (Tren Urbano Minillas Extension); 
Total cost: $560.0 million; 
New Starts share: $448.0 million; 
New Starts share of total cost: 80%. 

Project: Washington, D.C. (Dulles Corridor Bus Rapid Transit); 
Total cost: $389.1 million; 
New Starts share: $233.5 million; 
New Starts share of total cost: 60%. 

Source: GAO’s analysis of FTA’s data. 

[End of table] 

[End of section] 

Appendix III: Transit Agencies and Metropolitan Planning Organizations 
Contacted by GAO: 

Project: Alaska Marine Highway System; 
Transit agency contacted: Alaska Marine Highway System. 

Project: Alaska Railroad (Knik River to Wasilla Track Improvements); 
Transit agency contacted: Alaska Railroad Corporation. 

Project: Chicago (Ravenswood Line Expansion); 
Transit agency contacted: Chicago Transit Authority. 

Project: Cleveland (Euclid Corridor Transportation Project); 
Transit agency contacted: Greater Cleveland Regional Transit Authority. 

Project: Denver (West Corridor LRT); 
Transit agency contacted: Regional Transportation District. 

Project: Fort Collins, CO (Mason Street Transportation Corridor); 
Transit agency contacted: City of Fort Collins. 

Project: Galveston (Trolley Extension); 
Transit agency contacted: City of Galveston, Texas. 

Project: Kansas City, Johnson County (I-35 Commuter Rail); 
Transit agency contacted: Johnson County, Kansas. 

Project: Little Rock (River Rail Project); 
Transit agency contacted: Central Arkansas Transit Authority. 

Project: Los Angeles (Eastside Corridor LRT); 
Transit agency contacted: Los Angeles County Metropolitan 
Transportation Authority. 

Project: Los Angeles-San Diego (LOSSAN Rail Corridor Improvements); 
Transit agency contacted: Los Angeles-San Diego Rail Corridor Agency. 

Project: Louisville (South Central Corridor LRT); 
Transit agency contacted: Transit Authority of River City. 

Project: Miami (North 27th Avenue); 
Transit agency contacted: Miami-Dade Transit Agency. 

Project: Nashville (East Corridor Commuter Rail); 
Transit agency contacted: Regional Transportation Authority of 
Nashville, Tennessee. 

Project: New Orleans (Desire Corridor Streetcar); 
Transit agency contacted: Regional Transit Agency. 

Project: Pawtucket, RI (Commuter Rail Improvement Program). 
Transit agency contacted: Rhode Island Department of Transportation. 

Project: Philadelphia (Schuylkill Valley MetroRail); 
Transit agency contacted: Southeastern Pennsylvania Transportation 
Authority. 

Project: Pittsburgh (North Shore Connector LRT); 
Transit agency contacted: Port Authority of Allegheny County. 

Project: Salt Lake City (Medical Center Extension LRT); 
Transit agency contacted: Utah Transit Authority. 

Project: San Juan (Tren Urbano Minillas Extension); 
Transit agency contacted: Puerto Rico Department of Transportation and 
Public Works. 

Project: Stanford, CT (Urban Transitway and Intermodal Transportation 
Center Improvements); 
Transit agency contacted: City of Stamford, Connecticut. 

Project: Washington, D.C. (Dulles Corridor Bus Rapid Transit); 
Virginia Department of Rail and Public Transportation. 

Geographic location: Albany, New York; 
Metropolitan Planning Organizations contacted: Capital District 
Transportation Committee. 

Geographic location: Albuquerque, New Mexico;
Metropolitan Planning Organizations contacted: Middle Rio Grande 
Council of Governments. 

Geographic location: Atlanta, Georgia; 
Metropolitan Planning Organizations contacted: Atlanta Regional 
Commission. 

Geographic location: Beaumont, Texas; 
Metropolitan Planning Organizations contacted: South East Texas 
Regional Planning Commission. 

Geographic location: Boise, Idaho; 
Metropolitan Planning Organizations contacted: Community Planning 
Association of Southwest Idaho. 

Geographic location: Charlotte, North Carolina; 
Metropolitan Planning Organizations contacted: Charlotte Area Transit 
System[A]. 

Geographic location: Cheyenne, Wyoming; 
Metropolitan Planning Organizations contacted: Cheyenne Area 
Metropolitan Planning Organization. 

Geographic location: Cleveland, Ohio; 
Metropolitan Planning Organizations contacted: Northeast Ohio Areawide 
Coordinating Agency. 

Geographic location: Detroit, Michigan; 
Metropolitan Planning Organizations contacted: South East Michigan 
Council of Governments. 

Geographic location: Fargo, North Dakota; 
Metropolitan Planning Organizations contacted: Fargo-Moorhead Metro 
Council of Governments. 

Geographic location: Honolulu, Hawaii; 
Metropolitan Planning Organizations contacted: Oahu Metropolitan 
Planning Organization 

Geographic location: Indianapolis, Indiana; 
Metropolitan Planning Organizations contacted: Indianapolis 
Metropolitan Planning Organization. 

Geographic location: Las Vegas, Nevada; 
Metropolitan Planning Organizations contacted: Regional Transportation 
Commission of Clark County. 

Geographic location: Portland, Oregon; 
Metropolitan Planning Organizations contacted: Metro. 

Geographic location: Richmond, Virginia Richmond; 
Metropolitan Planning Organizations contacted: Regional Planning 
District Commission. 

Geographic location: San Joaquin, California; 
Metropolitan Planning Organizations contacted: San Joaquin Council of 
Governments. 

Geographic location: Spokane, Washington; 
Metropolitan Planning Organizations contacted: Spokane Regional 
Transportation Council. 

Geographic location: St. Louis, Missouri; 
Metropolitan Planning Organizations contacted: East-West Gateway 
Coordinating Council 

Geographic location: Tucson, Arizona; 
Metropolitan Planning Organizations contacted: City of Tucson 
Transportation Planning Division[B]. 

[A] The Mecklenburg-Union MPO referred us to the Charlotte Area 
Transit System. 

[B] Pima Association of Governments referred us to the City of Tucson 
Transportation Planning Division. 

[End of table] 

[End of section] 

Footnotes: 

1. A full funding grant agreement establishes the terms and conditions 
of federal financial participation in the project and the maximum 
amount of federal New Starts financial assistance for the project. FTA 
considers projects for full funding grant agreements after they have 
progressed from the initial planning and preliminary engineering 
phases to the final design and construction phases. 

2. Public Law 105-178 (June 9, 1998). 

3. See Mass Transit: FTA’s Progress in Developing and Implementing a 
New Starts Evaluation Process ([hyperlink, 
http://www.gao.gov/products/GAO/RCED-99-113], Apr. 26, 1999), Mass 
Transit: Implementation of FTA’s New Starts Evaluation Process and FY 
2001 Funding Proposals ([hyperlink, 
http://www.gao.gov/products/GAO/RCED-00-149], Apr. 28, 2000), and Mass 
Transit: FTA Could Relieve New Starts Program Funding Constraints 
([hyperlink, http://www.gao.gov/products/GAO/GAO-01-987], Aug. 15, 
2001). 

4. Mass Transit: Challenges in Evaluating, Overseeing, and Funding 
Major Transit Projects ([hyperlink, 
http://www.gao.gov/products/GAO/T-RCED-00-104], Mar. 8, 2000). 

5. Seventeen projects were not rated because projects with anticipated 
New Starts funding of less than $25 million are exempt from the 
evaluation and rating process. FTA strongly encourages sponsors who 
believe their projects to be exempt to nonetheless submit information 
for evaluation. Two other projects were not rated because they 
submitted insufficient information for a complete evaluation. 

6. In determining which projects can be expected to be ready for grant 
agreements and thus be recommended for funding, FTA applies tests for 
readiness and technical capacity. FTA ensures that no outstanding 
project scope or cost issues remain and that there are no outstanding 
local financial commitment issues. 

7. Alaska Marine Highway System has already received its federal 
funding and therefore was not included in our analysis. 

8. “Guaranteed” funds are subject to a procedural mechanism designed 
to ensure that minimum amounts of funding are available each year. 

9. Other federal funds available through DOT highway and transit 
programs can be used to develop, plan, or construct these projects. 

10. The alternatives analysis stage provides information on the 
benefits, costs, and impacts of alternative strategies leading to the 
selection of a locally preferred solution to the community’s mobility 
needs. During the preliminary engineering phase, project sponsors 
refine the design of the proposal, taking into consideration all 
reasonable design alternatives—which results in estimates of costs, 
benefits, and impacts. Final design is the last phase of project 
development before construction and may include right-of-way 
acquisition, utility relocation, and the preparation of final 
construction plans and cost estimates. 

11. FTA’s fiscal year 2003 evaluations were supported by reviews 
conducted by FTA contractors. 

12. In the annual appropriations act for DOT, the Congress specifies 
amounts of funding for individual New Starts projects. 

13. See Mass Transit: Implementation of FTA’s New Starts Evaluation 
Process and FY 2001 Funding Proposals ([hyperlink, 
http://www.gao.gov/products/GAO/RCED-00-149], Apr. 28, 2000). 

14. Most provisions of the final rule became effective in April 2001. 
Provisions regarding the measurement of transportation system user 
benefits took effect on September 1, 2001. 

15. In addition to the local share proposed to satisfy federal 
requirements, FTA considers additional commitments of local funds 
because they indicate a strong local commitment to the project. 
Previous nonfederal support for other significant fixed guideway 
systems implemented in the area is also considered. 

16. According to FTA, it attempts to reflect the unique 
characteristics and objectives of each New Starts project in 
consideration of the project justification criteria and other factors. 

17. Seventeen projects were not rated because projects with 
anticipated New Starts funding of less than $25 million are exempt 
from the evaluation and rating process. FTA strongly encourages 
sponsors who believe their projects to be exempt to nonetheless submit 
information for evaluation. Two other projects were not rated because 
they submitted insufficient information for a complete evaluation. 

18. In its fiscal year 2002 New Starts report, FTA rated 2 projects as 
highly recommended, 21 projects as recommended, and 3 projects as not 
recommended. 

19. The Department of Transportation and Related Agencies 
Appropriations Act for fiscal year 2002 authorized FTA to use up to 1 
percent of amounts made available for the New Starts program for 
project management oversight activities rather than .75 percent as 
under prior law. TEA-21 requires that specified amounts of New Starts 
funds be set aside annually for projects in Alaska and Hawaii, for new 
fixed guideway systems and extensions to existing systems that are 
ferry boats or ferry terminal facilities, or that are approaches to 
ferry terminal facilities. 

20. About $79.10 million would be allocated between two projects for 
which funding commitments are currently pending, and $55 million would 
be allocated between the two projects that are expected to be ready 
for funding commitments before the end of fiscal year 2003. 

21. These five projects were selected to receive 1 year of funding 
because they are located in a highly congested or rapidly growing 
area, have a high level of local financial commitment, and are 
expected to progress to final design and construction by the end of 
fiscal year 2003. 

22. The New Orleans (Canal Street Spine) project received an overall 
rating of recommended; the San Diego (Oceanside-Escondido Rail 
Corridor) project was rated as highly recommended. FTA is proposing 
these projects again for fiscal year 2003. 

23. As of November 2001. 

24. FTA will enter the period covered by the next authorization 
legislation with significant outstanding commitments (about $2.6 
billion), as at the beginning of the 6-year period covered by TEA-21. 

25. Of this amount, $785 million, $36.15 million was provided to 
several of the projects in this category in fiscal years 2001 and 2002. 

26. Under TEA-21, no more than 8 percent of the amounts made available 
each year for New Starts projects shall be available for activities 
other than final design and construction. 

27. These projects may be ready to progress to final design and 
construction by the end of fiscal year 2003. 

28. We acknowledged that this action would not preclude projects for 
which the funding commitment had been withdrawn from securing New 
Starts funding in the future, competing with other projects eligible 
for such commitments. 

29. According to FTA officials, FTA believes that grantees should be 
allowed a reasonable amount of time to correct problems with projects 
before it releases the associated commitment authority and that the 
amount of time allowed for any particular project would depend on the 
number of other projects “ready” for grant agreements. FTA has not 
released the $409 million committed to the Seattle (Central Link) 
project. 

30. Alaska Marine Highway System has already received its federal 
funding and therefore was not included in our analysis. 

31. According to FTA, total federal participation in any given transit 
project would remain capped at 80 percent. The proposed cap would 
limit only the percentage of New Starts funds available for projects. 
Transit projects could use other federal funds available (e.g., 
flexible highway funding) to secure total federal support for up to 80 
percent of the project’s costs. 

32. FTA’s 2003 New Starts report notes that projects’ financial plans 
should include a maximum New Starts share of 50 percent by fiscal year 
2004 to remain competitive with other projects in the New Starts 
pipeline and to meet lower federal share requirements proposed for the 
reauthorization of TEA-21. 

33. No FFGAs were signed in 1998. 

34. See Mass Transit: Implementation of FTA’s New Starts Evaluation 
Process and FY 2001 Funding Proposals ([hyperlink, 
http://www.gao.gov/products/GAO/RCED-00-149], Apr. 28, 2000). 

[End of section] 

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