Mass Transit:

FTA Needs to Provide Clear Information and Additional Guidance on the New Starts Ratings Process

GAO-03-701: Published: Jun 23, 2003. Publicly Released: Jun 23, 2003.

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Under the Transportation Equity Act for the 21 st Century (TEA-21), Congress authorized federal funding for New Starts fixed guideway transit projects--including rail and bus rapid transit projects that met certain criteria. In response to an annual mandate under TEA-21, GAO assessed the New Starts evaluation and ratings process for the fiscal year 2004 cycle, including (1) changes to the process and any related issues and (2) any challenges related to New Starts initiatives contained in the administration's fiscal year 2004 budget proposal.

FTA made two changes to the New Starts evaluation and ratings process for the fiscal year 2004 cycle. First, in response to language contained in a conference report prepared by the House Appropriations Committee, FTA adopted a 60 percent preference policy, which in effect, generally reduced the level of New Starts federal funding share for projects from 80 percent to 60 percent. Because FTA has not revised its program regulations to reflect this change, transit agencies, project sponsors, and the public did not have an opportunity to formally comment on the change. Explicitly stating its criteria and procedures in regulation would allow those involved in considering potential projects to make their investment decisions on the basis of a transparent process. Second, FTA revised some of the criteria used in the ratings process to include a new Transportation System User Benefits measure. Project sponsors GAO interviewed said that the measure was an improvement over the previous benefits measure because it considers benefits to both new and existing transit system riders. However, many project sponsors experienced difficulties in generating a value for the measure for a number of reasons, such as problems with their local forecasting models. FTA officials are working closely with project sponsors to correct these problems, but more guidance may be necessary to avert similar difficulties in the future. The administration's fiscal year 2004 budget proposal requests that $1.5 billion be made available for New Starts for that year, a 25 percent increase over fiscal year 2003. The budget proposal contains three initiatives--reducing the federal share to 50 percent, allowing certain nonfixed guideway projects to be funded through New Starts, and establishing a streamlined ratings process for projects requesting less than $75 million in New Starts funding. These initiatives may allow FTA to fund more projects and give local communities flexibility in choosing among transit modes. However, they may also create challenges for some future transit projects, such as difficulties in generating an increased local funding share or a reduction in the number of smaller communities that will participate in New Starts.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: We reported that FTA's regulations did not reflect its existing policy favoring New Starts projects with a federal funding share that did not exceed 60 percent of total project funding (meaning a 40 percent non-federal match) and we recommended that FTA revise its regulations to be consistent with its policy. In response, Congress and FTA took actions that led to the implementation of this recommendation. Congress incorporated provisions into the SAFETEA-LU legislation passed in August, 2005, which stated that DOT cannot require more than a 20 percent non-federal match in its New Starts program. FTA explicitly incorporated this SAFETEA-LU provision regarding the 20 percent match in two documents (FTA's May 16, 2007 guidance and its 2006 Annual Report on New Starts), noting that project sponsors were still encouraged to request the lowest possible federal share, given limited funds and the number of projects in the New Starts pipeline.

    Recommendation: To ensure that the New Starts regulations reflect FTA's actual evaluation and ratings process and procedures, the Secretary of Transportation should direct the Administrator, FTA, to amend the agency's regulations governing the level of federal funding share for projects for reflect its current policy.

    Agency Affected: Department of Transportation

  2. Status: Closed - Implemented

    Comments: FTA completed several actions and has other ongoing efforts to address the recommendation, including: (1) in both 2003 and 2004, FTA provided additional guidance and instructions to sponsors on the practices that must be followed in preparing the Transportation System User Benefits (TSUB) measure, including developing travel demand forecasting assumptions, measuring travel time savings, using the Summit software in developing the measure, and calculating costs for the measure; (2) FTA also updated its detailed technical guidance on travel forecasting methods and the interpretation and use of travel forecast data, which it made available to sponsors through its web site; (3) FTA provided additional guidance in July 2003 on how it would evaluate the TSUB measures in the fiscal year (FY) 2005 rating process; (4) FTA held several special workshops for transit agencies on TSUB benefits, travel forecasting, and development of transit alternatives; and (5) FTA initiated a proactive outreach to project sponsors to help them prepare and evaluate the TSUB measure, identifying weaknesses in their proposed measure and suggesting improvements. As a result, the number of projects that were "not rated" due to missing information on the TSUB declined in the FY 2005 ratings cycle. In addition, FTA has a number of ongoing planned improvements to its guidance, including developing a Users Guide to the Summit Software and developing TSUB case studies and exemplary practices.

    Recommendation: To systematically address the problems with the implementation of the Transportation System User Benefits measure, the Secretary of Transportation should direct the Administrator, FTA, to issue additional guidance to transit agencies describing FTA's expectations regarding the local travel forecasting models and the specific type of data FTA requires to calculate the measure.

    Agency Affected: Department of Transportation


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