# Presentation: 544007

## New Starts Dialogue

- Welcome to the FTA Webinar
- March 21, 2005

## Purpose of Webinar

- Provide an overview of the New Starts evaluation and rating process.
- Clarify the Administration’s policy with regard to funding recommendations for proposed New Starts projects
- Answer your questions about the possible changes to the New Starts evaluation process for next year, for consideration...
- As you develop written comments
- As you consider changes to your project or its funding

## What we are not doing today...

- Taking comments on the proposed changes.
- All comments must be submitted in writing to the DOT Docket.
- Taking questions about or discussing individual New Starts projects.

## Our Panelists

## Our Audience

- How many people are participating at your site connection?
- One person
- 2 – 5 people
- 6 – 10 people
- 10 – 15 people
- More than 15 people

## Our Audience

- Which statement best describes who is participating at your site?
- Transit agency staff only, including the general manager
- Transit agency staff only, ***not*** including the general manager
- Consultants only (government affairs and/or technical consultants)
- Transit agency staff and consultants
- Other (association staff, federal employees, MPO staff, etc.)

## Our Audience

- How would you characterize the community in which your transit agency operates?
- Urbanized area with more than one million people
- Urbanized area with population between 200,000 and one million
- Urbanized area with population between 50,000 and 200,000
- Non-urbanized area
- Not applicable

## Our Audience

- If you are a New Start project sponsor, in what stage of development is your project?
- Final Design
- Preliminary Engineering
- I do not have a project in final design or preliminary engineering, but do have at least one project in Alternatives Analysis
- I do not have a project in development, but do have a project with an FFGA.
- Not applicable.

## The New Starts Program

**A Federal, state and local transportation partnership**
- Discretionary, competitive program
- Average Federal New Starts share: 50%
**$1.5 billion program requested in FY 2006**
- Grown steadily from $440 million in 1991 (340%)
**Funds new and extensions to existing fixed guideway systems**
- Light rail, subway/heavy rail, commuter rail, bus rapid transit
**Projects are evaluated and rated by FTA **
- For entry into Preliminary Engineering, Final Design, Full Funding Grant Agreement (FFGA)
- And annually for the New Starts Report
**Projects are funded through multi-year agreements – FFGAs**
- Subject to Congressional appropriations

## New Starts Project Development

- Alternatives Analysis    1-2 years

- Preliminary Engineering2-3 years

- 3-7 years

- Operation

**FTA Approval Required for****Full Funding Grant Agreement (FFGA)**

- 100+ AA Projects

- 27 PE Projects

- 8 FD Projects

**FTA Approval Required**

**FTA Approval Required**

- 27 FFGA Projects

- Construction

- Final Design

## New Starts: A Competitive Program

- Of 27 projects evaluated for New Starts Report issued in February 2005:
- 2 Highly Recommended
- 12 Recommended
- 8 Not Recommended
- 5 Not Rated
-  7 projects were exempt from FTA evaluation and rating because they requested less than $25 million in Federal New Starts funds.

## The FTA New Starts Evaluation and Rating Framework

**Non-Section**
**5309 Share**

**Capital **
**Finances**

**Operating **
**Finances**

**Other **
**Factors**

- Low Income
-  Households

- User
-  Benefits

- Mobility
-  Improvements

-   Environmental
- Benefits

- Operating
-  Efficiencies

**Cost **
**Effectiveness**

**Land**
** ****Use**

***The FTA New Starts Evaluation and Rating Framework***

- Minimum Project Development Requirements:

- Employment

- Capital
-  Cost

- O&M
- Cost

- User
-  Benefits

- Metropolitan Planning and Programming Requirements

**Project Management Technical Capability**

- Other                       Considerations

**NEPA                                    Approvals**

**Project Justification Rating**

**Financial Rating**

## Cost Effectiveness Rating and Funding Recommendations

- Projects with a “low” cost-effectiveness rating:
- Are not advanced in the development process (PE, FD)
- Are not recommended for funding by the Administration
- Projects with a “medium-low” cost-effectiveness rating:
- Will not be recommended for funding by the Administration

**Cost-Effectiveness**
- High
- Medium-High
- Medium
- Medium-Low
- Low

## Implementation of New Funding Recommendation Policy

**Why are you making this policy change?**
- Concerns raised by Congress, IG, GAO, OMB
- Protect the long-term health of the program and the industry
**When is this policy effective?**
- 	The policy is effective immediately.

## Implementation of New Funding Recommendation Policy

**How many projects are affected by the new policy? **
- One project in final design and 6 projects in preliminary engineering currently have “medium-low” cost-effectiveness rating
- Of the 6 projects in PE, one must also overcome a poor finance rating
- We do not know how the policy will affect the 9 projects that did not submit project justification data this year
- Of these 9, however, 4 must overcome a poor finance rating

## Implementation of New Funding Recommendation Policy

**Will any projects be “grandfathered” by the Administration?**
- 	Those projects listed as “Anticipated FFGAs” in the President’s FY 06 Budget Proposal will not be affected by this policy.  These projects received a specific funding recommendation in the President’s FY 2006 Budget.
**Will the six projects that were classified “Other Projects” in the President’s FY 06 Budget have to meet the new requirement?**
- 	Yes.  In order to receive a funding recommendation from the Administration for the FY 06 budget, these projects must achieve at least a “medium” rating for cost-effectiveness.

## Questions Regarding the Policy on Funding Recommendations?

- To ask a question online, please click the “**Chat**” button to enter a text question over the Internet.

- If you would like to make a general comment, please wait until the final Q&A Session at the end of the event.

## Other Potential Changes that Could Affect Cost-Effectiveness Calculations

- FTA is seeking comments on five possible changes to the New Starts process for the upcoming project rating cycle.
- Decisions must be made in April, so that guidance can be provided in time for project sponsors to submit data beginning in late June.
- We are seeking your opinions about whether and how to implement all, some or none of the changes.

## Option 1: Inflation Adjustment

- Adjust the cost-effectiveness rating thresholds to reflect the impact of inflation, potentially on a regional basis.
- In written comments submitted to the docket, we’d like your opinion about:
- Which inflation adjustment factor should be utilized (docket shows variety of options)?
- Whether an inflation adjustment besides those presented on the docket be considered?
- Whether a regional cost adjustment be utilized (see docket for possible regional adjustment factor)?
- Whether a different regional cost adjustment index should be utilized?

- To ask a question online, please click the “**Chat**” button to enter a text question over the Internet.

## Option 2: Planning Horizon

- Permit the use of a 2030 planning horizon, as State and Metropolitan Planning Organizations revise the time horizons of their long-range transportation plans.
- In written comments submitted to the docket, we’d like your opinion about:
- If a project sponsor wants to use a 2030 time horizon for ridership forecasts, should FTA require that the region’s adopted long-range transportation plan utilizes the same time horizon?

- To ask a question online, please click the “**Chat**” button to enter a text question over the Internet.

## Option 3: Useful Life Update 

- Adjust annualized capital costs to reflect standard cost categories and revised useful life assumptions, consistent with recently updated useful life estimates.
- Some observations that may be helpful as you consider your written comments:
- Useful life estimates are longer than previously recognized.  Example:  Stations now have useful life of 70 years, instead of 30 years.
- Standard cost categories were introduced last year; this change implements our intention to require their use by all project sponsors.

- To ask a question online, please click the “**Chat**” button to enter a text question over the Internet.

## Option 4: Modal Constants 

- Permit the use of modal constants in the travel forecasting models of communities proposing new modes of transit in order to reflect demonstrated consumer preferences.
- Some observations that may be helpful as you consider your written comments:
- This proposal would only affect projects proposing a mode of transit that does not currently exist in their area (6 current proposed projects).  Previously, they were not permitted to use modal constants.
- Should the principle of applying standardized constants also be applied to transit systems that have existing modes, instead of permitting them to generate a unique value for their constant through local model validation?

- To ask a question online, please click the “**Chat**” button to enter a text question over the Internet.

## Option 5:  Soft Costs

-    Exclude “soft costs” from the calculation of cost-effectiveness, to better focus this measure on the infrastructure investment costs of each project.
- Some observations that may be helpful as you consider your written comments:
- Examples of “soft costs” include: administrative expenses, costs related to the required Before and After Study, and, potentially, start-up and testing costs.
- “Soft costs” would still be counted in the total project cost and would be eligible for New Starts funding.

- To ask a question online, please click the “**Chat**” button to enter a text question over the Internet.

## Closing Q & A

- 		To ask a question online, please click the
- 		“**Chat**” button to enter the text.

## Thank You!

**Reference Docket Number: 20585**
- To view background documents or comments on the proposed New Starts changes, please go to:
- _[http://dms.dot.gov/](http://dms.dot.gov/)_
- To submit written comments:
**Fax:**  202-493-2251
**Mail:**  Docket Management Facility, U.S. Department of Transportation, 400 Seventh Street, S.W., Room PL-401, Washington, D.C. 20590-0001
**Hand Delivery: ** Room PL-401 on the plaza level of the Nassif Building, 400 Seventh Street, S.W., Washington, D.C., between 9 a.m. and 5 p.m. Monday through Friday, except Federal holidays.