Mass Transit:

FTA Could Relieve New Starts Program Funding Constraints

GAO-01-987: Published: Aug 9, 2001. Publicly Released: Aug 15, 2001.

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The Federal Transit Administration's (FTA) New Starts program has provided state and local agencies with more than $6 billion in the last eight years to help design and construct transit projects. Although the funding for this program is higher than it has ever been, the demand for these resources is also extremely high. 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. This report discusses (1) the refinements made to FTA's evaluation and rating process since last year, (2) how New Starts projects were selected for FTA's New Starts report and budget request for fiscal year 2002, and (3) FTA's remaining New Starts commitment authority. GAO found that FTA made several refinements to its rating process. For instance, potential grantees were more strictly assessed on their ability to build and operate proposed projects than in the past. FTA also made several technical changes and established new performance measures to evaluate the program. New Starts projects were selected by evaluating 40 new projects for 2002 and developing ratings for 26 of them. FTA then determined whether the projects rated "highly recommended" or "recommended" met its readiness criteria. Of these projects, FTA recommended four of them for funding commitments. FTA also recommended three additional projects--one that was exempt from the rating process and two that were rated last year. FTA reports that it will have limited authority to make funding commitments to new projects in fiscal year 2003 if it enters into the seven New Starts grant agreements in 2002 as proposed.

Recommendation for Executive Action

  1. Status: Closed - Implemented

    Comments: The Federal Transit Administration recently released $157 million (out of $647 million) that was associated with the Los Angeles subway project--a project for which the federal funding commitment had been withdrawn. In August 2001, GAO reported that two segments of that project has been suspended for over 3 years, and that FTA had informed the project sponsors that it no longer had funding commitments for these segments. Therefore, GAO recommended (in Aug. 2001) that FTA adopt the practice of releasing such commitment authority and, specifically, that it release the $647 million reserved for two segments of the LA subway project. In its April 2002 report, GAO highlighted that FTA had proposed a funding commitment (which has since been approved) 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 followed GAO's recommendation and released the associated commitment authority ($157 million)--which increases FTA's flexibility to execute grant agreements for additional projects.

    Recommendation: The Secretary of Transportation should direct the Administrator of FTA to make commitment authority allocated to projects for which the federal funding commitments have been withdrawn available for all projects competing for New Starts funding. Specifically, FTA should "release" the $647 million reserved for the Los Angeles project.

    Agency Affected: Department of Transportation


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