a

GAO

United States Government Accountability Office

Report to Congressional Committees

June 2005 PUBLIC 

TRANSPORTATION

Opportunities Exist to 

Improve the 

Communication and 

Transparency of 

Changes Made to the 

New Starts Program

GAO-05-674
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

www.gao.gov/cgi-bin/getrpt?GAO-05-674.

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact Katherine 

Siggerud at (202) 512-2834 or 

siggerudk@gao.gov. 

Highlights of GAO-05-674, a report to 

congressional committees 

June 2005

PUBLIC TRANSPORTATION 

Opportunities Exist to Improve the 

Communication and Transparency of 

Changes Made to the New Starts Program 

For the fiscal year 2006 evaluation cycle, FTA evaluated and rated 27 

projects and identified 4 projects that were expected to be ready for new 

FFGAs before the end of fiscal year 2006 and an additional 6 projects that 

may be eligible for other funding outside of FFGAs. The administration’s 

fiscal year 2006 budget proposal requests $1.5 billion for the New Starts 

program, a request similar to that of the past 2 years. 

FTA has made 16 changes to the New Starts application, evaluation, rating, 

and oversight processes since the fiscal year 2001 cycle that were primarily 

intended to make the process more rigorous and systematic. Seven of the 16 

changes underwent rulemaking, including providing formal notice to the 

transit industry and soliciting comment, while 9 changes did not. FTA 

officials said that these nine changes are consistent with the existing 

regulations governing the New Starts process or relate to the project 

development oversight process rather than the evaluation and rating process 

and, therefore, in their opinion, do not need to undergo formal rulemaking. 

By not consistently soliciting public opinion, however, FTA is missing an 

opportunity to obtain stakeholder buy-in, increase the transparency of the 

New Starts process, and lessen potential difficulties project sponsors face in 

implementing the changes. 

Many of the measures FTA uses to evaluate and rate New Starts projects 

have evolved over time, with industry input, through formal rulemaking and 

informal efforts, such as workshops and reports. Although both TEA-21 and 

FTA’s New Starts program regulations emphasize the importance of using a 

multiple-measure approach for evaluating projects, FTA assigns weight to all 

three financial criteria but only two of the five project justification criteria in 

developing a project’s rating. FTA officials said that they do not use the 

other three project justification criteria—which are specified in TEA-21—

because the measures fail to distinguish among projects. Project sponsors 

we interviewed offered suggestions for improving all of the project 

justification measures, and FTA has efforts underway to improve some of 

the measures. 

Example of a New Starts Project with an Existing FFGA - Bay Area Rapid Transit Extension 

to San Francisco International Airport 

Source: GAO.

The Transportation Equity Act for 

the 21st Century (TEA-21) and 

subsequent legislation authorized 

about $13.5 billion in guaranteed 

funding for the Federal Transit 

Administration’s (FTA) New Starts 

program, which is used to select 

fixed guideway transit projects, 

such as rail and trolley projects, 

and to award full funding grant 

agreements (FFGA). GAO assessed 

the New Starts process for the 

fiscal year 2006 cycle. GAO 

identified (1) the number of 

projects that were evaluated, rated, 

and proposed for new FFGAs and 

the proposed funding commitments 

in the administration’s budget 

request; (2) changes FTA has made 

to the New Starts application, 

evaluation, rating, and oversight 

processes since the fiscal year 2001 

evaluation cycle and how these 

changes have been communicated 

to project sponsors; and (3) how 

FTA developed the measures used 

to evaluate and rate projects from 

the criteria outlined in TEA-21 and 

how those measures are used in the 

rating process. 

What GAO Recommends

This report makes a number of 

recommendations intended to 

ensure that the New Starts 

regulations reflect FTA’s current 

evaluation and rating process and 

ensure that FTA’s New Starts 

evaluation process and policies are 

objective, transparent, and follow 

the spirit of federal statutes and 

regulations. FTA officials agreed 

with the findings and 

recommendations in this report. 
Page i GAO-05-674 Public Transportation

Contents

Letter 1

Results in Brief 3

Background 5

FTA Identified Four New Projects for FFGAs and Requested $1.5 

Billion for Fiscal Year 2006 10

FTA Has Implemented a Number of Changes to the New Starts 

Program, Some Without Project Sponsors’ Input 16

New Starts Measures Have Evolved Over Time, but Not All Measures 

Count Toward a Project’s Rating 29

Conclusions 42

Recommendations for Executive Action 43

Agency Comments and Our Evaluation 44

Appendixes

Appendix I: Scope and Methodology 46

Appendix II: Projects with Existing FFGAs and Projects in Preliminary 

Engineering and Final Design in the Fiscal Year 2006 Cycle 49

Appendix III: Status of Previous GAO Recommendations for Improving the 

New Starts Evaluation Process 52

Appendix IV: Key New Starts Provisions Contained in House and Senate 

Reauthorization Bills 54

Appendix V: FTA’s Project Justification Measures for Evaluating and 

Rating New Starts Projects 55

Appendix VI: GAO Contacts and Staff Acknowledgments 56

Related GAO Products 57

Tables Table 1: FTA’s Criteria for Assigning Overall Project Ratings 9

Table 2: Changes to the New Starts Application, Evaluation, Rating, 

and Project Development Oversight Processes since the 

Fiscal Year 2001 Evaluation Cycle 18

Table 3: Strengths, Weaknesses, and Other Concerns about New 

Starts Measures, as Identified by Project Sponsors 39

Table 4: Suggestions for Improving New Starts Measures, as 

Identified by Project Sponsors 42

Table 5: Projects Contacted for Our Review 47
Contents

Page ii GAO-05-674 Public Transportation

Figures Figure 1: New Starts Planning and Development Process 7

Figure 2: New Starts Project Evaluation Criteria 8

Figure 3: Distribution of New Starts Projects in Preliminary 

Engineering and Final Design for Fiscal Year 2000 to 2006 

Evaluation Cycles 12

Figure 4: Total New Starts Funding for Fiscal Year 2006 Equals $1.5 

Billion 15

Figure 5: Criteria and Measures for Evaluating Projects, as 

Outlined in TEA-21 and FTA’s New Starts Program 

Regulations 32

Figure 6: Weights Used to Determine Project Justification and 

Financial Summary Ratings for New Starts Projects 35

Abbreviations

APTA American Public Transportation Association

BRT bus rapid transit

FFGA full funding grant agreement

FTA Federal Transit Administration

ISTEA Intermodal Surface Transportation Efficiency Act of 1991

LRT light rail transit

MOS minimum operable segment

TEA-21 Transportation Equity Act for the 21st Century

TSUB Transportation System User Benefits

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Page 1 GAO-05-674 Public Transportation

United States Government Accountability Office

Washington, D.C. 20548

A

June 28, 2005 Letr

The Honorable Richard C. Shelby

Chairman

The Honorable Paul S. Sarbanes

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

Much of the federal government’s share of new capital investment in mass 

transportation since the early 1970s has come through the Federal Transit 

Administration’s (FTA) New Starts program, which awards full funding 

grant agreements (FFGA) for fixed guideway rail, bus rapid transit, and 

ferry projects across the country.1

 An FFGA establishes the terms and 

conditions for federal participation in a project, including the maximum 

amount of federal funds available for the project, which by statute cannot 

exceed 80 percent of its net cost. Since fiscal year 1998, the New Starts 

program has provided state and local agencies with more than $8.8 billion2

to help design and construct transit projects throughout the country.

Under the Transportation Equity Act for the 21st Century (TEA-21)3

 and 

subsequent amendments and other legislation, Congress authorized 

approximately $13.5 billion in New Starts commitment authority through 

2005.4

 Even though the level of program funding is higher than it has ever 

been, demand for these funds has also been extremely high. For that 

1

Fixed guideway systems use and occupy a separate right-of-way for the exclusive use of 

public transportation services. They include fixed rail, exclusive lanes for buses and other 

high-occupancy vehicles, and other systems.

2

This is the amount appropriated through fiscal year 2005, according to FTA.

3

Pub. L. No. 105-178, 112 Stat. 107 (1998).

4

New Starts commitment authority is the amount of funding Congress has authorized FTA to 

commit to New Starts projects for a given authorization period.
Page 2 GAO-05-674 Public Transportation

reason, TEA-21 directed FTA to prioritize projects for funding by 

evaluating, rating, and recommending potential projects on the basis of 

specific financial and project justification criteria—including mobility 

improvements, cost-effectiveness, environmental benefits, and operating 

efficiencies. In applying these criteria, TEA-21 directed FTA to consider a 

number of additional factors, including land use and congestion relief. 

Furthermore, TEA-21 required FTA to issue regulations for the evaluation 

and rating process, which FTA did in December 2000.

TEA-21 also 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.5

 This report discusses (1) the number of projects that were 

evaluated, rated, and proposed for new FFGAs for the fiscal year 2006 

evaluation cycle6

 and the proposed funding commitments for New Starts in 

the administration’s fiscal year 2006 budget request; (2) changes that FTA 

has made to the New Starts application, evaluation, rating, and oversight 

processes since TEA-21 and how those changes have been communicated 

to project sponsors; and (3) how FTA developed the measures it uses to 

evaluate and rate projects from the criteria identified in TEA-21 and how 

the agency uses these measures in the evaluation process. To address these 

objectives, we reviewed the administration’s fiscal year 2006 budget 

request; the legislation and regulations governing the New Starts process; 

and FTA’s annual New Starts reports, reporting instructions, and other 

program guidance and documentation. We also interviewed FTA officials 

and representatives from the American Public Transportation Association, 

the New Starts Working Group,7

 and the projects that were rated in the 

fiscal year 2006 evaluation cycle.8

 In addition, we attended FTA’s meetings 

with project sponsors—the New Starts Roundtables—in April and May 

5

See the list of related GAO products at the end of this report.

6

The fiscal year 2006 evaluation cycle began in May 2004, with the issuance of the New 

Starts reporting instructions. Applications were due in August 2004, and FTA’s evaluation of 

the applications was conducted in the fall of 2004. The annual report was published in 

February 2005 and included funding recommendations for fiscal year 2006.

7

The New Starts Working Group is an organization of New Starts project sponsors, 

metropolitan planning organizations, and private industry transit firms who advocate on 

behalf of the New Starts program and specific projects.

8

FTA rated 27 projects in the fiscal year 2006 cycle, but one of these projects subsequently 

withdrew from the New Starts process; therefore, we interviewed sponsors from 26 

projects.
Page 3 GAO-05-674 Public Transportation

2005. We conducted our work from November 2004 through May 2005 in 

accordance with generally accepted government auditing standards. (See 

app. I for more information about our scope and methodology.)

Results in Brief For the fiscal year 2006 evaluation cycle, FTA evaluated and rated 27 

projects and identified 4 that were expected to be ready for new FFGAs 

before the end of fiscal year 2006. In addition, FTA identified 6 other 

projects as potentially being eligible for funding outside of FFGAs. The 

administration is requesting a total of $1.5 billion for the New Starts 

program (an amount similar to that requested for the last 2 years). This 

amount includes $634.6 million for projects with existing FFGAs and $590 

million for projects proposed for new FFGAs. The total number of projects 

evaluated and rated has declined slightly every year since TEA-21, from 42 

projects in the fiscal year 2000 evaluation cycle to 27 projects in the most 

recent cycle, while the number of recommended and highly recommended 

projects has varied from year to year.

FTA has implemented 16 changes to the New Starts application, evaluation, 

rating, and project development oversight processes since the fiscal year 

2001 evaluation cycle, using a variety of communication methods, but has 

not consistently sought industry input before implementing the changes. 

By not soliciting public opinion, FTA is missing an opportunity to obtain 

stakeholder buy-in, increase the transparency of the New Starts process, 

and lessen potential difficulties project sponsors face in implementing the 

changes. Although the impetus for each change varied, FTA officials stated 

that, in general, all of the changes were intended to make the process more 

rigorous, systematic, and transparent. For example, the requirement for 

project sponsors to develop a plan for evaluating the impacts of the project 

and the accuracy of ridership projections will identify lessons learned and 

hold transit agencies accountable for results. Some project sponsors told 

us a few of the changes have helped to improve the program, while others 

expressed a variety of concerns about the effect of some changes. For 

example, seven project sponsors stated that the “make the case” document 

helped them focus on the key benefits of the projects and three said it 

helped them “sell” the project to local decisionmakers or the public. Ten 

project sponsors noted, however, that FTA did not provide clear guidance 

on how to develop the “make the case” document and eight said that they 

had to produce multiple iterations of the document. FTA communicates 

information about changes to project sponsors through a variety of 

different methods, including regulations, reporting instructions, and the 

agency’s Web site. Project sponsors we interviewed had varying opinions 
Page 4 GAO-05-674 Public Transportation

on the effectiveness of these communication methods but overall found 

that the Web site was ineffective because it was difficult to navigate and 

information was not consolidated in one location. Seven of the changes 

that FTA has made to the New Starts process since the fiscal year 2001 

evaluation cycle underwent rulemaking, including providing formal notice 

to the transit industry and soliciting public comment, while nine changes 

did not. The Freedom of Information Act requires federal agencies to 

publish in the Federal Register notice of changes to programs, and the 

Administrative Procedure Act sets out the rulemaking process required to 

make changes to agencies’ rules and procedures. FTA officials said that the 

changes they have made are consistent with the existing regulations 

governing the New Starts process and that some of the changes relate to 

the project development oversight process rather than the evaluation and 

rating process; therefore, in their opinion, the regulations do not need to be 

amended. Of the nine changes that did not undergo rulemaking, six 

changes—including the administration’s new cost-effectiveness funding 

recommendation practice that would generally target funding 

recommendations to projects that achieve at least a medium costeffectiveness rating—were made without FTA providing any avenues for 

public review and comment prior to their implementation. When formal 

rulemaking is not necessary, there are less formal options available for 

soliciting public comment. For example, in March 2005, FTA solicited 

public comment on three recent technical changes to the rating process.

Many of the measures that FTA uses to evaluate projects predate TEA-21 

and have evolved over time through an iterative process—involving FTA, 

industry, and Congress—through rulemaking, outreach sessions, and 

reports. The measures reflect congressional direction to evaluate projects 

against a variety of criteria, including mobility improvements, 

environmental benefits, operating efficiencies, and cost-effectiveness, and 

to consider other issues, such as land use, in the evaluation of projects. 

FTA’s regulations governing the New Starts program likewise emphasize a 

multiple-measure approach. Using a series of these measures, FTA 

evaluates projects against statutorily identified criteria, including three 

local financial commitment criteria and five project justification criteria. 

Each local financial commitment criterion is counted toward a project’s 

overall rating. However, only two of the project justification criteria 

typically count toward a project’s overall rating, despite statements in the 

New Starts program regulations that all of the criteria will be used. 

Specifically, FTA currently assigns a weight of 50 percent each to the costeffectiveness and land use criteria; the other three project justification 

criteria are not assigned weights. FTA sought industry input on whether 
Page 5 GAO-05-674 Public Transportation

there should be a weighting system in the last rulemaking process; 

however, according to FTA officials, the agency did not receive input that 

was useful to inform its policy. Consequently, the regulations are silent on 

the weights that should be assigned to each criterion and do not prohibit 

FTA from treating various criteria as more important than others. FTA 

officials said that the measures for the other three project justification 

criteria—mobility improvements, environmental benefits, and operating 

efficiencies—do not meaningfully distinguish among projects, and aspects 

of the mobility improvements criterion are already captured in the measure 

for cost-effectiveness. Although FTA has made improvements to the 

measures for land use and cost-effectiveness, it has not yet been able to 

identify measures for the other three project justification criteria that make 

meaningful distinctions among projects for the purpose of rating and 

funding decisions. FTA officials told us that they will initiate a formal 

rulemaking process after the program is reauthorized, at which point all 

New Starts policies and procedures will be reevaluated.

This report makes recommendations to the Secretary of Transportation to 

ensure that FTA’s New Starts regulations reflect its weighting policy, to 

improve the measures used to evaluate projects so that all criteria named in 

statute can be used to develop a project’s rating, to publish future changes 

to the New Starts program in the Federal Register, and to solicit industry 

comment on changes, through rulemaking or some other process, as 

appropriate. To ensure that transit agencies have clear information on the 

New Starts program, we are also recommending that FTA consolidate 

guidance, reporting instructions, and other New Starts program 

information in one location on its Web site. The Department of 

Transportation, including FTA, reviewed a draft of this report. FTA officials 

generally agreed with the report’s findings, conclusions, and 

recommendations.

Background TEA-21 authorized a total of $36 billion in “guaranteed” funding for a 

variety of transit programs, including financial assistance to states and 

localities to develop, operate, and maintain transit systems.9

 Under one of 

these programs, New Starts, FTA identifies and selects fixed-guideway 

transit projects for funding—including heavy, light, and commuter rail; 

ferry; and certain bus projects (such as bus rapid transit). FTA generally 

9

“Guaranteed” funds are subject to a procedural mechanism designed to ensure that a 

minimum amount of funding is made available each year over the life of the project.
Page 6 GAO-05-674 Public Transportation

funds New Starts projects through FFGAs, which establish the terms and 

conditions for federal participation in a New Starts project and also define 

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 an FFGA, a project must progress through a local or regional 

review of alternatives and meet a number of federal requirements, 

including providing information for the New Starts evaluation and rating 

process (see fig. 1). As required by TEA-21, New Starts projects must 

emerge from a regional, multimodal transportation planning process. The 

first two phases of the New Starts process—systems planning and 

alternatives analysis—address this requirement. The systems planning 

phase identifies the transportation needs of a region, while the alternatives 

analysis phase provides information on the benefits, costs, and impacts of 

different corridor-level options, such as rail lines or bus routes. The 

alternatives analysis phase results in the selection of a locally preferred 

alternative—which is intended to be the New Starts project that FTA 

evaluates for funding, as required by statute. After a locally preferred 

alternative is selected, project sponsors submit a request to FTA for entry 

into the preliminary engineering phase.10 Following completion of 

preliminary engineering and federal environmental requirements, the 

project may be approved by FTA to advance into final design,11 after which 

the project may be approved by FTA for an FFGA and proceed to 

construction, as provided for in statute. FTA oversees grantee management 

of projects from the preliminary engineering phase through construction 

and evaluates the projects for advancement into each phase of the process, 

as well as annually for the New Starts report to Congress. We have 

recognized the New Starts program as a good model that the federal 

government could use for approving other transportation projects.

10During 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 (e.g., financial or environmental). According to 

FTA officials, to gain approval for entry into preliminary engineering, a project must (1) have 

been identified through the alternatives analysis process, (2) be included in the region’s 

long-term transportation plan, (3) meet the statutorily defined project justification and 

financial criteria, and (4) demonstrate that the sponsors have the technical capability to 

manage the project during preliminary engineering. Some federal New Starts funding is 

available to projects for preliminary engineering activities.

11Final 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.
Page 7 GAO-05-674 Public Transportation

Figure 1: New Starts Planning and Development Process

Alternatives analysis

Select locally preferred 

alternative, apply for 

preliminary engineering

FTA evaluation to 

enter preliminary

engineering

Preliminary engineering: 

Complete environmental documents

Refine financial plan

FTA evaluation

to enter final design

Final design: 

Commit nonfederal funds

Complete construction plans 

Acquire necessary rights-of-way

Complete final design

Begin construction

FFGA

awarded

FTA evaluation

for FFGA

FTA oversight (including

evaluation and rating)

FFGA Full funding grant agreement

Major development stage

Decision point

FTA decision point

Source: FTA.
Page 8 GAO-05-674 Public Transportation

To help inform administration and congressional decisions about which 

projects should receive federal funds, FTA assigns ratings based on a 

variety of financial and project justification criteria, as defined by its 

program regulations, and then assigns an overall rating. These criteria are 

identified in TEA-21 and reflect a broad range of benefits and effects of the 

proposed project, such as cost-effectiveness, as well as the ability of the 

project sponsor to fund the project and finance the continued operation of 

its transit system (see fig. 2). Projects are rated at several points during the 

New Starts process—as part of the evaluation for entry into preliminary 

engineering and final design, and yearly for inclusion in the New Starts 

annual report.

Figure 2: New Starts Project Evaluation Criteria

a

Other factors can include environmental justice and equity issues, economic development initiatives, 

innovative financing, etc.

FTA assigns the proposed project a rating of high, medium-high, medium, 

low-medium, or low for each criterion, then assigns a summary rating for 

local financial commitment and project justification. Finally, FTA develops 

an overall project rating of “highly recommended,” “recommended,” “not 

recommended,” or “not rated.” (See table 1 for the criteria FTA uses to 

evaluate projects.) The exceptions to this process are statutorily “exempt” 

projects, which are those that request less than $25 million in New Starts 

funding. These projects are not required to submit project justification 

Overall project rating

Project justification

summary rating

Financial

commitment

summary rating

Share of non-New

Starts funding

Operating

finance plan

Capital

finance plan

Mobility

improvements

Environmental

benefits

Operating

efficiencies

Costeffectiveness Land use

Other factorsa

Source: FTA.
Page 9 GAO-05-674 Public Transportation

information—although FTA encourages them to do so—and do not receive 

ratings from FTA; thus, the number of projects in preliminary engineering 

or final design may be greater than the number of projects evaluated and 

rated by FTA.

Table 1: FTA’s Criteria for Assigning Overall Project Ratings

Source: FTA.

As required by statute, the administration uses the FTA evaluation and 

rating process, along with the stage of development of New Starts projects, 

to decide which projects to recommend to Congress for funding.12

Although many projects receive an overall rating of “recommended” or 

“highly recommended,” only a few are proposed for FFGAs in a given fiscal 

year. FTA proposes “recommended” or “highly recommended” projects for 

FFGAs when it believes that the projects will be able to meet certain 

conditions during the fiscal year that the proposals are made. These 

conditions include the following:

• All non-New Starts funding must be committed and available for the 

project.

Overall rating category Criteria

Highly recommended Requires at least a medium-high for both 

the financial and project justification 

summary ratings

Recommended Requires at least a medium for both the 

financial and project justification summary 

ratings

Not recommended Assigned to projects not rated at least 

medium for both the financial and project 

justification summary ratings

Not rated Indicates that insufficient information was 

submitted or that FTA has serious concerns 

about the information submitted because 

the underlying travel forecasting 

assumptions used by the project sponsor 

may have inaccurately represented the 

benefits of the project

12The administration’s funding recommendations are made in the President’s budget and are 

included in FTA’s annual New Starts report to Congress, which is released each February in 

conjunction with the President’s budget.
Page 10 GAO-05-674 Public Transportation

• The project must be in the final design phase and have progressed to the 

point where uncertainties about costs, benefits, and impacts (e.g., 

environmental or financial) are minimized.

• The project must meet FTA’s tests for readiness and technical capacity, 

which confirm there are no cost, project scope, or local financial 

commitment issues remaining.

FTA Identified Four 

New Projects for 

FFGAs and Requested 

$1.5 Billion for Fiscal 

Year 2006

Of the 34 projects in preliminary engineering or final design for the fiscal 

year 2006 cycle, 27 were evaluated and rated and 7 were statutorily exempt 

from the rating process. Four projects were recommended for funding with 

the expectation that they would be ready for new FFGAs before the end of 

fiscal year 2006, and an additional 6 projects were identified as potentially 

receiving a recommendation for New Starts funding outside of FFGAs. The 

administration’s fiscal year 2006 budget proposal requests a total of $1.5 

billion for the New Starts program, an amount similar to requests for the 

past 2 fiscal years. (See app. II for the administration’s 2006 budget 

proposal and FTA’s project ratings.)

FTA Evaluated and Rated 27 

Projects and Proposed 4 for 

FFGAs in Fiscal Year 2006

FTA’s Annual Report on New Starts: Proposed Allocations of Funds for 

Fiscal Year 2006 (“annual report”) listed a total of 34 projects in 

preliminary engineering and final design, and FTA evaluated and rated 27 of 

them.13 Seven were statutorily exempt from being rated because they 

requested less than $25 million in New Starts funding. Of the 27 projects 

that were rated, 2 were highly recommended, 12 were recommended, 8 

were not recommended, and 5 were designated “not rated.” In its annual 

report, FTA said that projects were designated as “not rated” because they 

did not submit the required information or because of FTA’s continuing 

concerns about the reliability of the transportation benefits forecast for 

these projects. According to FTA, a principal source of these concerns was 

inconsistent assumptions used in defining the baseline alternative and the 

proposed New Starts project, making it difficult to isolate the impacts of 

the proposed project. In some cases, the local travel demand models were 

inconsistent with FTA guidance and good planning practice. FTA is 

13FTA does not evaluate and rate projects with existing FFGAs, that are in alternatives 

analysis, or that are statutorily exempt because they are requesting less than $25 million in 

New Starts funding.
Page 11 GAO-05-674 Public Transportation

currently working with the sponsors of these projects to improve the 

forecasts.

As shown in figure 3, the combined number of recommended and highly 

recommended projects declined sharply from 27 in the fiscal year 2003 

evaluation cycle to 14 in the fiscal year 2004 evaluation cycle, while the 

combined number of not recommended and not rated projects rose from 6 

to 18. As we previously reported, this was primarily due to difficulties 

project sponsors encountered when implementing the new costeffectiveness measure—the Transportation System User Benefits (TSUB) 

measure14—and adjusting to FTA’s preference policy that favors projects 

that seek a federal New Starts share of no more than 60 percent of the total 

project costs.15 According to FTA, the information that was provided by 

project sponsors in their reports on TSUB highlighted previously unknown 

problems with many local models that forecast travel demand. FTA first 

incorporated both of these changes beginning with the fiscal year 2004 

evaluation cycle. Project ratings generally improved (i.e., there were more 

projects with recommended ratings and fewer with not recommended 

ratings) in the fiscal year 2005 evaluation cycle as project sponsors 

improved their financial plans, grew more comfortable with the new costeffectiveness measure, and made corrections and improvements to their 

models that forecast travel demand, according to FTA.16 While the 

combined number of not rated and not recommended projects was 

approximately the same in the fiscal year 2005 and 2006 evaluation cycles, 

the number of projects receiving ratings of at least recommended has 

decreased slightly again. Unlike in previous years, however, there was no 

obviously identifiable reason for this change, except for the fact that some 

projects moved out of the ratings pool and into construction, according to 

FTA.

14FTA uses the incremental cost per hour of TSUB for assessing a project’s costeffectiveness.

15For more information about the problems project sponsors encountered in implementing 

these changes, see GAO, Mass Transit: FTA Needs to Provide Clear Information and 

Additional Guidance on the New Starts Ratings Process, GAO-03-701 (Washington, D.C.: 

June 23, 2003).

16See GAO, Mass Transit: FTA Needs to Better Define and Assess Impact of Certain 

Policies on New Starts Program, GAO-04-748 (Washington, D.C.: June 25, 2004).
Page 12 GAO-05-674 Public Transportation

Figure 3: Distribution of New Starts Projects in Preliminary Engineering and Final 

Design for Fiscal Year 2000 to 2006 Evaluation Cycles

Note: The pool of projects evaluated and rated each year changes, as some projects from the 

previous year receive FFGAs and begin construction, while new projects enter preliminary engineering 

and are evaluated and rated for the first time.

0

10

20

30

40

50

60

2000 2001 2002 2003 2004 2005 2006

Highly recommended

Recommended

Not recommended

Not rated

Exempt

Source: GAO analysis of FTA data.

Fiscal year

Number
Page 13 GAO-05-674 Public Transportation

The fiscal year 2006 rating cycle saw the smallest total number of projects 

in preliminary engineering and final design during the TEA-21 period. The 

number of projects evaluated and rated has decreased slightly every year, 

from 42 projects in the fiscal year 2000 rating cycle to 27 projects in the 

most recent cycle.17 During this same time frame, the number of exempt 

projects grew steadily through the fiscal year 2004 cycle but has been 

declining ever since. FTA officials suggested that these trends could be the 

result of a combination of factors. First, many of the projects that TEA-21 

authorized have worked their way through the New Starts process and 

obtained FFGAs, and thus are not subject to the annual evaluation and 

rating process. At the same time, new projects entered preliminary 

engineering each year and were rated for the first time. FTA officials 

speculated that additional projects would be included in reauthorization 

legislation and would enter the New Starts pipeline over the course of the 

reauthorization period. Second, FTA has increased the level of scrutiny it 

applies to projects attempting to advance from alternatives analysis to 

preliminary engineering to help ensure that only the strongest projects 

enter the New Starts pipeline. Third, FTA has worked with project sponsors 

to reduce the number of inactive projects in the New Starts pipeline. 

Fourth, since the time TEA-21 was enacted, some state and local 

transportation agencies have been feeling the impact of local budget 

constraints, making it more difficult to secure local funding for proposed 

New Starts projects. This could be exacerbated by FTA’s policy of favoring 

projects that seek a federal New Starts share of no more than 60 percent of 

the total project costs. As we reported in 2004, several project sponsors 

told us that FTA’s push for a lower federal New Starts share would likely 

affect their decision to advance future transit projects.18 Therefore, we 

recommended that FTA examine the impact of the preference policy on 

projects in the evaluation process. FTA is considering how to conduct such 

an examination.

FTA’s evaluation process informed the administration’s recommendation to 

fund four projects that are expected to be ready for new FFGAs before the 

end of fiscal year 2006, including Charlotte, South Corridor Light Rail 

Transit; New York, Long Island Rail Road East Side Access; Phoenix, 

Central Phoenix/East Valley Light Rail Transit Corridor; and Pittsburgh, 

17While the total number of projects in preliminary engineering and final design has 

fluctuated from year to year, this includes the statutorily exempt projects. Once these 

projects are excluded from the total, the number declines steadily each year.

18GAO-04-748.
Page 14 GAO-05-674 Public Transportation

North Shore Light Rail Transit Connector. The total capital cost of these 

four projects is estimated to be $9.9 billion, of which the total federal New 

Starts share is expected to be $3.6 billion. FTA executed an FFGA for the 

Phoenix project in January 2005 and for the Charlotte project in May 2005. 

The other two projects are expected to be ready for FFGAs before the end 

of fiscal year 2006. According to FTA, the remaining projects that received 

overall ratings of recommended or highly recommended do not yet pass 

FTA’s readiness tests for FFGAs.

The administration also proposed reserving $158.6 million in New Starts 

funding for final design and early construction activities for as many as six 

“other projects,” including San Diego, Mid-Coast Light Rail Transit 

Extension; Denver, West Corridor Light Rail Transit; New York, Second 

Avenue Subway; Washington County (Oregon), Wilsonville to Beaverton 

Commuter Rail; Dallas, Northwest-Southeast Light Rail; and Salt Lake City, 

Weber County to Salt Lake City Commuter Rail. These six projects were in 

or nearing final design, received overall highly recommended or 

recommended ratings, and had cost-effectiveness ratings above “low.” 

According to FTA officials, no other projects met these criteria. The annual 

report did not specify amounts for particular projects to ensure that the 

project is moving forward as anticipated prior to making specific funding 

recommendations to Congress, according to FTA officials, because projects 

may encounter unexpected financial or other obstacles that slow their 

progress. For example, FTA told us that the sponsor for one of the projects 

is considering a significant expansion of the project scope, which would 

put it back in preliminary engineering and render it ineligible for the funds 

FTA proposed reserving for the “other projects” for fiscal year 2006. 

Reserving funds for these projects without specifying a particular amount 

for any given project will allow the administration to make “real time” 

funding recommendations when Congress is making appropriations 

decisions. FTA does not anticipate that all of the six projects will be 

recommended for funding in fiscal year 2006.

Administration’s Proposed 

Fiscal Year 2006 Budget 

Requests Similar Amount of 

Funding to Previous Years 

The administration’s fiscal year 2006 budget proposal requests that $1.5 

billion be made available for the New Starts program, an amount similar to 

that requested in the last two fiscal years. Figure 4 illustrates the specific 

budget allocations the administration has proposed for fiscal year 2006, 

including the following:

• $634.6 million would be allocated among the 16 projects with existing 

grant agreements,
Page 15 GAO-05-674 Public Transportation

• $590 million would be allocated to four projects expected to be 

proposed for new FFGAs,

• $158.6 million would be allocated to as many as six “other” projects to 

continue project development, and 

• $122.5 million is reserved to be allocated among projects in preliminary 

engineering, at the discretion of Congress and as provided in law.19 

Figure 4: Total New Starts Funding for Fiscal Year 2006 Equals $1.5 Billion 

Note: FTA is authorized to use up to 1 percent of amounts made available for the New Starts program 

for project management oversight activities. 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 

19TEA-21 limits the amount of New Starts funding that can be used for purposes other than 

final design and construction to not more than 8 percent of funds appropriated.

Existing FFGAs

($635 million)

Anticipated FFGAs

($590 million)

1%

Ferry capital projects, AK and HI

($10 million)

Other projects

($159 million)

Source: GAO analysis of FTA data.

41%

10%

39%

1%

Oversight activities 

($15 million)

Preliminary engineering

($122 million) 8%
Page 16 GAO-05-674 Public Transportation

extensions to existing systems that are ferry boats or ferry terminal facilities or that are approaches to 

ferry terminal facilities.

FTA had approximately $2.2 billion in commitment authority—that is, the 

amount of funding authorized for New Starts projects—remaining as of 

May 2005. TEA-21 and subsequent amendments and legislation provided 

FTA the authority to make about $13.5 billion in funding commitments for 

New Starts projects. Surface transportation programs, including the New 

Starts program, were scheduled to expire in September 2003, but have 

subsequently been extended through June 2005.20 According to FTA 

officials, the commitment authority for fiscal year 2006 and beyond will be 

addressed in the next surface transportation authorization legislation. 

However, FTA officials told us that there will not be sufficient commitment 

authority remaining to execute all four proposed FFGAs until additional 

commitment authority is provided through congressional authorization.

FTA Has Implemented 

a Number of Changes 

to the New Starts 

Program, Some 

Without Project 

Sponsors’ Input

FTA has made 16 changes to the New Starts application, evaluation, rating, 

and project development oversight processes since the fiscal year 2001 

evaluation cycle—the first full evaluation and rating cycle after the 

enactment of TEA-21. FTA has used a variety of written and electronic 

methods to communicate information about these changes, although it 

primarily relies on reporting instructions, roundtables, and workshops. For 

nine of these changes, FTA did not publish information about the change in 

the Federal Register or institute a rulemaking process and for six of these 

nine changes did not provide any avenues for public review and comment 

prior to implementing the changes. FTA has said that all of the changes it 

has made are consistent with the evaluation framework outlined in the 

existing regulations governing the New Starts process. Some project 

sponsors we interviewed thought certain changes helped to improve the 

process; however, a considerable number of project sponsors expressed 

concern that they did not have an opportunity to comment on many of the 

changes before they were implemented and have experienced considerable 

challenges while attempting to incorporate some of the changes. For 

example, some changes have required project sponsors to devote 

additional agency resources, as well as time.

20The Surface Transportation Extension Act of 2005 (P.L. 109-14) extended the programs 

until June 30, 2005.
Page 17 GAO-05-674 Public Transportation

FTA Has Made 16 Changes 

Intended to Improve the 

Application, Evaluation, 

Rating, and Project 

Development Oversight 

Processes since the Fiscal 

Year 2001 Evaluation Cycle

We identified 16 changes that FTA made to the New Starts application, 

evaluation, rating, and project development oversight processes since the 

fiscal year 2001 evaluation cycle.21 These changes range from requiring that 

projects undergo a risk assessment to instituting new practices for funding 

recommendations. (See table 2 for complete list of changes.) For example, 

FTA made two significant changes to the evaluation and rating process for 

the fiscal year 2004 evaluation cycle. First, FTA implemented the TSUB 

measure as a variable in the calculation of cost-effectiveness and mobility 

improvements.22 The new measure is intended to calculate the change in 

the amount of travel time and costs that people incur for taking a trip. This 

is a more comprehensive measure than the old “cost per new rider” 

measure because it takes into account a broader set of benefits to transit 

riders, including new and existing transit riders. Second, in response to 

language contained in appropriations committee reports, FTA instituted a 

preference policy favoring projects that seek a federal New Starts share of 

no more than 60 percent of the total project cost. As shown in table 2, FTA 

implemented changes for a variety of reasons, including simplifying the 

New Starts process and focusing more on results and performance. 

Although the impetus for each change varied, FTA officials stated that, in 

general, all the changes were intended to make the process more rigorous, 

systematic, and transparent. For example, the requirement for project 

sponsors to develop a plan for evaluating the impacts of the project and the 

accuracy of travel forecasts—that is, a Before and After study—will 

identify lessons learned and hold transit agencies accountable for results. 

In our previous work we have commented on a number of these changes 

and made some recommendations for improving the New Starts process. 

(See app. III for a list of recommendations from previous reports.)

21We compiled a list of changes that FTA has made to the application, evaluation, rating, and 

project development oversight processes from TEA-21, FTA regulations, annual reports and 

reporting instructions, and previous GAO reports. We verified this list of changes with FTA 

officials and project sponsors. We chose the fiscal year 2000 evaluation cycle as our baseline 

because this was the first cycle to reflect some TEA-21 changes. TEA-21 formalized many 

pre-existing FTA practices, so we did not include those in our review. FTA has also made 

other minor modifications to the New Starts process, which we did not include in our 

review.

22This change was included in the formal rulemaking process initiated after TEA-21 and was 

published as part of the New Starts program regulations in December 2000.
Page 18 GAO-05-674 Public Transportation

Table 2: Changes to the New Starts Application, Evaluation, Rating, and Project Development Oversight Processes since the 

Fiscal Year 2001 Evaluation Cycle 

Change

Brief description of 

change

Method and 

date introduced

Evaluation 

cycle 

effective

Reason for 

change

Published in 

Federal 

Register?

Formal 

opportunity 

for comment?

Additional 

subfactors added 

to the land use 

criterion

Several additional "statutory 

considerations" were added 

to the land use criterion, 

including the cost of sprawl, 

infrastructure cost savings 

due to compact land use, 

and population density and 

current transit ridership in a 

corridor. 

Transportation 

Equity Act for the 

21st Century 

(TEA-21)/New 

Starts 

regulations, June 

1998/Dec. 2000

Fiscal year 

(FY) 2003

Required by 

TEA-21

Yes Yes

Baseline 

alternative 

introduced

FTA eliminated the 

requirement for the separate 

no-build and transportation 

system management 

alternatives,a

 and instead 

requires that the proposed 

New Start be evaluated 

against a single "baseline 

alternative" (i.e., the best 

that can be done without the 

New Starts investment).

New Starts 

regulations, Dec. 

2000

FY 2003 Simplify New 

Starts process 

and address 

project sponsor 

concerns about 

undue reporting 

burden

Yes Yes 

Pedestrian 

mobility formally 

incorporated into 

land use criterion

Pedestrian mobility had 

been a component of FTA's 

land use evaluation, as 

described in FTA guidance 

issued each year. However, 

the regulations formally 

incorporated an element for 

pedestrian mobility into the 

land use criterion. 

New Starts 

regulations, Dec. 

2000

FY 2003 Formalize agency 

practice

Yes Yes

“Employment 

near stations” 

measure added 

to mobility 

improvements 

criterion

FTA added a new factor to 

calculate destinations for 

jobs within a half-mile radius 

of boarding points on the 

new system, complementing 

the existing factor that 

measures low-income 

households within a halfmile radius of boarding 

points.

New Starts 

regulations, Dec. 

2000

FY 2003 Address industry 

concerns that 

FTA was 

undervaluing 

destination trips

Yes Yes
Page 19 GAO-05-674 Public Transportation

Decision rule for 

financial 

summary rating

FTA instituted a decision 

rule that required projects to 

receive at least a "medium" 

rating for both capital and 

operating plans to get an 

overall "recommended" 

rating. 

New Starts 

regulations, Dec. 

2000

FY 2003 Emphasize both 

capital and 

operating plans

Yes Yes 

Before and After 

study required b

Project sponsors seeking a 

full funding grant agreement 

(FFGA) for their New Starts 

project must submit to FTA a 

plan for the collection and 

analysis of information 

leading to the identification 

of the impacts of the project 

and the accuracy of the 

forecasts that were prepared 

during project planning and 

development. 

New Starts 

regulations, Dec. 

2000

FY 2003 Overall 

government 

focus on 

performance and 

results

Yes Yes

Transportation 

System User 

Benefits (TSUB) 

measure 

introduced

FTA revised its costeffectiveness and mobility 

improvements criteria by 

adopting the TSUB measure 

that includes benefits for 

both new and existing transit 

system riders.

New Starts 

regulations, Dec. 

2000

FY 2004 Address 

industry’s 

concerns about 

cost per new 

rider index

Yes Yes

Project 

justification 

criteria weights 

changed

The cost-effectiveness and 

land use criteria were each 

weighted 50%. In the 

previous rating cycle, FTA 

attempted to use all five 

project justification criteria in 

the rating process.

Reporting 

instructions,c

June 2003

FY 2004 Other criteria’s 

measures do not 

meaningfully 

distinguish 

among projects

No No

60% preference 

policy instituted

FTA instituted a preference 

policy in its ratings process 

favoring current and future 

projects that do not request 

more than a 60% federal 

share. To achieve this, FTA 

changed its criterion related 

to capital finance plans to 

give projects seeking a 

federal share greater than 

60% a "low" financial rating.

Annual report for 

FY 2004 

evaluation cycle 

FY 2004 FY 2004 

Appropriations 

Conference 

Report

No No

(Continued From Previous Page)

Change

Brief description of 

change

Method and 

date introduced

Evaluation 

cycle 

effective

Reason for 

change

Published in 

Federal 

Register?

Formal 

opportunity 

for comment?
Page 20 GAO-05-674 Public Transportation

Risk 

assessments 

introduced b

The Risk Assessment is an 

FTA management and 

oversight tool intended to 

identify the issues that could 

affect schedule or cost, as 

well as the probability that a 

cost estimate will be met. 

New Starts and 

FTA construction 

roundtables,d

April/May 2003

FY 2005 Implemented for 

project 

management 

oversight

No No

"Make the case" 

document 

required b

FTA requires all project 

sponsors to submit a threepage narrative that justifies 

why the New Starts project 

is the best possible 

alternative and why it is 

needed.

Reporting 

instructions,c

June 2003

FY 2005 To have a short 

document that 

describes the 

individual merits 

of a project from 

the community’s 

perspective

No No

Travel forecasts 

requested in 

advance of 

application 

deadline

FTA encouraged (but did not 

require) grantees to submit 

their travel forecasts by June 

30, 2004, in advance of the 

Aug. 20 deadline for the rest 

of the information. 

Reporting 

instructions,c

April 2004

FY 2006 To allow technical 

assistance to be 

provided in time 

for the project to 

be rated in the 

upcoming annual 

report 

No No

Costeffectiveness 

practiceb

Generally, the administration 

will target its funding 

recommendations to 

projects that achieve a costeffectiveness rating of 

medium or higher to be 

recommended for funding. 

Previously, the 

administration would 

recommend projects for 

funding that had a lowmedium cost-effectiveness 

rating, if they met all other 

criteria. 

New Starts 

Workshope and 

FTA "Dear 

Colleague" letter,f 

March 2005

FY 2007 Address 

concerns raised 

by the DOT 

Inspector 

General, 

Congress, and 

Office of 

Management and 

Budget

No No

Standard cost 

categories 

required

FTA updated the useful life 

assumptions for various 

categories of assets and is 

requiring project sponsors to 

report costs in standard 

categories.

New Starts 

Workshope

 and 

FTA "Dear 

Colleague" letter,f

March 2005

FY 2007 To be consistent 

with useful life 

estimates

No Yes

Costeffectiveness 

rating 

breakpoints 

adjusted for 

inflation

FTA adjusted costeffectiveness rating 

breakpoints for inflation 

using the Gross Domestic 

Price Index.

New Starts 

Workshope and 

FTA "Dear 

Colleague" letter,f

March 2005

FY 2007 Costeffectiveness 

breakpoints were 

first established 

in 2002

No Yes

(Continued From Previous Page)

Change

Brief description of 

change

Method and 

date introduced

Evaluation 

cycle 

effective

Reason for 

change

Published in 

Federal 

Register?

Formal 

opportunity 

for comment?
Page 21 GAO-05-674 Public Transportation

Sources: GAO and FTA.

a

The transportation system management alternative is equivalent to the New Starts baseline 

alternative for most New Starts projects.

b

FTA officials identified these changes as involving project development oversight that do not affect 

project ratings.

c

FTA uses reporting instructions to provide project sponsors with technical and procedural assistance 

on the application and reporting of New Starts criteria. 

d

FTA uses New Starts roundtables to share information and experiences with project sponsors, identify 

and discuss common issues, and generate suggestions for improving the planning and development 

process.

e

The American Public Transportation Association typically hosts an annual legislative conference at 

which FTA conducts an information session on the New Starts program.

f

The Dear Colleague letter is periodically sent from the FTA Administrator to project sponsors 

regarding issues associated with the New Starts program. 

2030 planning 

horizon permitted

Project sponsors will be 

permitted to use either a 

2025 or 2030 planning 

horizon for estimating the 

project’s costs and benefits 

to maintain consistency with 

the horizon year used by the 

local metropolitan planning 

organization.

New Starts 

Workshope and 

FTA "Dear 

Colleague" letter,f

March 2005

FY 2007 To maintain 

consistency with 

what local 

metropolitan 

planning 

organizations are 

using

No Yes

(Continued From Previous Page)

Change

Brief description of 

change

Method and 

date introduced

Evaluation 

cycle 

effective

Reason for 

change

Published in 

Federal 

Register?

Formal 

opportunity 

for comment?
Page 22 GAO-05-674 Public Transportation

Some project sponsors we interviewed thought that certain changes helped 

to improve the process. For instance, seven project sponsors stated that 

the “make the case” document helped them focus on the key benefits of the 

projects and three said it helped them “sell” the project to local 

decisionmakers or the public. In addition, many project sponsors 

acknowledged that the TSUB measure is more comprehensive than the old 

“cost per new rider” measure. However, project sponsors expressed a 

variety of concerns about the effects the changes had on the steps required 

to complete the application process and about FTA’s implementation of the 

changes. For instance, for the “make the case” document, 15 project 

sponsors stated that FTA did not create clear expectations, 10 noted that 

FTA prepared no written guidance, and 5 indicated that FTA did not provide 

specific examples or templates.23 A few of these project sponsors also 

stated that they did not feel like they understood what FTA wanted for the 

“make the case” document, and eight said that they had to produce multiple 

iterations of the document. Twelve project sponsors also mentioned they 

were not clear about how FTA was using the document. In addition, when 

asked what effect the implementation of the TSUB measure had on their 

project, 13 of 26 project sponsors said it made the application process more 

expensive, and 20 of 26 said that this measure required them to spend 

significantly more time to complete the application. Similar comments 

were made by project sponsors about other changes, including the risk 

assessment and Before and After study requirements.24 For example, when 

asked what effect the risk assessment requirement has had on their project, 

4 of the 26 project sponsors said it resulted in a more rigorous or 

systematic evaluation and rating process, 7 said it made the process more 

expensive, and 5 said it delayed their project. Three project sponsors noted 

that each of the individual requirements add to the overall workload and 

eventually result in the application process becoming a full-time project. 

However, some project sponsors observed that as they become more 

familiar with each change and as FTA issues more guidance, such as for 

using FTA’s software to calculate the TSUB value, the change has become 

less burdensome.

23In response to project sponsor requests, in June 2005, FTA e-mailed two examples of the 

“make the case” document to those project sponsors who had registered for the 2005 New 

Starts roundtables. 

24Both the TSUB and the Before and After study requirements were included in the formal 

rulemaking process, and were implemented as part of the New Starts program regulations in 

December 2000.
Page 23 GAO-05-674 Public Transportation

In Spring 2005 FTA Introduced 

New Cost-Effectiveness Practice 

and Technical Changes to the 

Cost-Effectiveness Calculation

In March 2005, FTA announced a new practice for the New Starts program 

whereby the administration will generally target funding recommendations 

to projects able to achieve at least a medium or higher cost-effectiveness 

rating. FTA announced this change through a “Dear Colleague” letter sent 

to FTA grantees, including current New Starts project sponsors. The letter 

was also posted on the home page of FTA’s Web site. The administration’s 

previous policy had been to recommend projects for funding that received 

at least a medium-low cost-effectiveness rating, provided that they met all 

other criteria and project readiness requirements. In the letter to project 

sponsors, FTA explained that the impetus for change was the concerns that 

GAO, the Office of Management and Budget, the Department of 

Transportation’s Inspector General, and Congress raised about 

recommending projects for funding that had medium-low costeffectiveness ratings.25 In the letter, and in subsequent communication to 

project sponsors, FTA also stated that the practice applies to a 

recommendation for funding and not to the way the project’s overall rating 

is determined. For example, a project can still receive an overall 

recommended project rating with a medium-low cost-effectiveness rating 

and can advance from preliminary engineering to final design with this 

rating; however, as a general rule, the project would not be recommended 

for funding by the administration. FTA has said that this new practice will 

help it to further prioritize and distinguish among projects for federal 

funding, which is important given current fiscal challenges and the 

resulting need to maximize the benefit of every federal dollar invested in 

transportation.

According to FTA officials, the four New Starts projects with anticipated 

FFGAs for the fiscal year 2006 cycle (see app. II) will not be affected by the 

new practice. However, FTA has said that the six New Starts projects that 

are categorized as “other projects” in the fiscal year 2006 annual report—

and therefore eligible for a portion of the $158.6 million in New Starts funds 

FTA reserved—will be subject to the new cost-effectiveness funding 

recommendation practice and will continue to be subject to this practice 

when they apply for an FFGA. According to FTA, two of the six “other 

projects” currently do not meet this standard, and FTA is working with 

them to improve their cost-effectiveness rating. Six project sponsors we 

25For example, see GAO-04-748 and “The Rating and Evaluation of New Starts Transit 

Systems,” Statement of the Honorable Kenneth M. Mead, Inspector General, U.S. 

Department of Transportation, before the Committee on Appropriations, Subcommittee on 

Transportation, Treasury and Independent Agencies, U.S. House of Representatives,

April 28, 2004.
Page 24 GAO-05-674 Public Transportation

interviewed expressed concern as to whether they would be able to make 

the necessary modifications to their projects in order to earn a higher costeffectiveness rating by the next evaluation cycle—which begins in August 

2005. Also, seven project sponsors commented that FTA puts too much 

emphasis on the cost-effectiveness measure, and four indicated that the 

new cost-effectiveness practice increases this emphasis. FTA officials 

stated that FTA and the administration consider more than just costeffectiveness in making funding recommendations, noting that every 

project that received a not recommended rating in the last 2 years did so 

because of its poor financial summary rating. 

In addition to the new cost-effectiveness practice in the March “Dear 

Colleague” letter, FTA also proposed five technical changes to the way costeffectiveness is calculated and asked for industry comment on these 

proposed changes by April 1, 2005. All comments were posted on the 

Department of Transportation’s online docket26 and were available for 

public review. The proposed changes included (1) adjusting the costeffectiveness rating breakpoints (i.e., low, low-medium, medium, mediumhigh, high) for inflation, and possibly applying a regional index in an effort 

to address cost differences across the country; (2) permitting project 

sponsors to utilize either a 2025 or 2030 planning horizon to be consistent 

with metropolitan planning organizations’ regional planning processes; (3) 

permitting standardized costs and the proposed adjustments to useful life 

estimates, which clarify and lengthen these estimates for a number of 

assets; (4) permitting modal constants for new guideway modes as a means 

of enabling travel models to estimate the effect of improvements to transit 

service quality beyond the time and cost measures already accounted for in 

the travel models (such as comfort and reliability); and (5) excluding some 

soft costs (e.g., administrative expenses) from the calculation of 

annualized capital costs for the purpose of calculating cost-effectiveness. 

FTA officials told us that they wanted to obtain industry comment on the 

proposed changes and to use this feedback to help decide which proposed 

changes to adopt. Officials from FTA also said the deadline for industry 

comments was driven by the reporting deadlines for the New Starts annual 

evaluations and the need to promptly release reporting instructions for the 

News Starts program. On the basis of FTA’s review of the proposed changes 

26The Department of Transportation publishes and stores on-line information about 

proposed and final regulations, copies of public comments on proposed rules, and related 

information on its Docket Management System. The department uses this docketed material 

when making regulatory and adjudicatory decisions, and makes docketed material available 

for review by interested parties.
Page 25 GAO-05-674 Public Transportation

and project sponsor responses, FTA announced in an April 29th “Dear 

Colleague” letter its decision to incorporate three of the five proposed 

changes for the fiscal year 2007 cycle—adjusting rating breakpoints for 

inflation, permitting the 2030 design year forecast, and permitting the use 

of the standardized cost categories’ useful life assumptions to calculate 

annualized capital costs for the purpose of calculating cost-effectiveness. 

FTA stated that further research is needed on the other two proposed 

changes. FTA incorporated the three technical changes into its fiscal year 

2007 reporting instructions, which were released to project sponsors on 

May 3, 2005. 

FTA Uses Multiple Methods 

to Communicate 

Information about Changes

FTA communicates information about changes to project sponsors through 

a variety of different methods, including annual reporting instructions, 

“Dear Colleague” letters to project sponsors, conversations with project 

sponsors, roundtables and workshops with FTA officials and project 

sponsors, and the FTA Web site. FTA officials indicated that they most 

heavily rely on regulations, reporting instructions, and roundtables and 

workshops to communicate information about changes to the New Starts 

application, evaluation, rating, and project development oversight 

processes. In particular, FTA officials told us that they use the workshops 

as a two-way communication vehicle, during which they can explain the 

New Starts application and evaluation process to project sponsors. The 

workshops are usually held two to four times a year in conjunction with a 

transit industry conference. For example, during the American Public 

Transportation Association (APTA) legislative conference in early March 

2005, FTA officials held a workshop to discuss the New Starts process as 

well as the administration’s new cost-effectiveness funding 

recommendation practice. The agency also holds two New Starts 

roundtables each year to explain the application and evaluation process 

and allow project sponsors the opportunity to have an open discussion 

with FTA officials as well as share information on best practices. FTA used 

this year’s New Starts roundtables in New York and San Francisco to, 

among other things, respond to questions about the recently introduced 

changes. FTA’s annual reporting instructions also describe changes to the 

application and evaluation process, in addition to providing guidance to 

project sponsors on preparing their New Starts submittal. For instance, in 

the reporting instructions for the New Starts report for the fiscal year 2005 

evaluation cycle, FTA introduced the change to the weighting system used 

to calculate the project justification rating. 
Page 26 GAO-05-674 Public Transportation

Project sponsors told us that they generally learn about changes through 

one or more of FTA’s communication methods, although they have varying 

views on the effectiveness of the different methods. Most project sponsors 

we interviewed said that they typically view the roundtables and 

workshops and conversations with FTA officials as generally or very 

effective methods for learning about changes. However, some concerns 

were also raised about these communication methods. First, three project 

sponsors stated that they feel compelled to attend all of FTA’s workshops 

and roundtables in order to keep up with the changes to the New Starts 

process because these meetings are the primary methods FTA uses to 

introduce changes. Others noted that they have received inconsistent 

information about changes depending on the source. As a result, 18 of 26 

project sponsors stated they prefer to obtain information about the 

changes directly from FTA officials—and 11 of these project sponsors 

stated that they prefer to receive the information in writing for 

documentation purposes. Eleven of the 26 project sponsors we interviewed 

said that FTA’s Web site was generally or very ineffective as a method for 

communicating information about changes. Project sponsors cited a 

variety of challenges in using the Web site as a source of information about 

changes to the New Starts program. For example, some project sponsors 

stated the Web site was difficult to navigate and had a poor search engine, 

while others stated they had difficulty finding information about the New 

Starts program and that in some cases the information they retrieved from 

the Web site was not up to date. Several project sponsors indicated that 

maintaining a central repository for all information related to the New 

Starts program on FTA’s Web site would be helpful. 

FTA Has Not Consistently 

Used the Public Notice or 

Rulemaking Process to 

Introduce Changes or Solicit 

Industry Comment on 

Proposed Changes 

Of the 16 changes that FTA has made to the New Starts application, 

evaluation, rating, and project development oversight processes since the 

fiscal year 2001 evaluation cycle, seven underwent rulemaking, including 

providing formal notice to the transit industry and soliciting public 

comment, while nine changes did not (see table 2). The Freedom of 

Information Act requires federal agencies to publish in the Federal Register

notice of changes to programs and the Administrative Procedure Act sets 

out the rulemaking process—which would include notifying the public and 

soliciting and considering comments, among other things—required to 

make changes to agencies’ rules and procedures. FTA last undertook 

rulemaking for the New Starts program in 1999 at the direction of TEA-21
Page 27 GAO-05-674 Public Transportation

and issued regulations in December 2000.27 Officials from FTA told us that 

they have not amended their regulations to incorporate the nine changes 

made to the New Starts process since that time because, in their opinion, 

the changes are within the framework of the current regulations. FTA 

officials also said that some of the changes—such as the risk assessment 

requirement—involve project development oversight and do not affect the 

evaluation and rating process; therefore, in their view, the changes do not 

need to be included in program regulations. However, by making changes 

outside of the regulatory process, FTA has missed an opportunity to obtain 

formal public input on the proposed changes, which would increase the 

transparency of the agency’s decision-making process and ensure that the 

views of project sponsors and other interested parties are considered. 

There are a range of options available to FTA for obtaining industry input, 

from the more formal rulemaking process to less formal ways of soliciting 

comment. In those instances where FTA determines that a formal 

rulemaking process is unnecessary, it could provide project sponsors an 

informal opportunity to review and comment on any substantive changes 

proposed for the New Starts program, as FTA recently did when it solicited 

public comment on proposed technical changes to the rating process. 

Of the nine changes that were not published in the Federal Register and did 

not undergo rulemaking, six were made without providing other avenues 

for public review and comment prior to their implementation. For example, 

FTA did not seek industry input before implementing the risk assessment 

requirement, project justification criteria weights, and the “make the case” 

changes to the document. The limited opportunities to review and 

comment on proposed changes have resulted in implementation problems, 

according to some project sponsors. In addition, FTA did not provide 

project sponsors the opportunity to comment on the administration’s 

recently announced cost-effectiveness funding recommendation practice. 

Many project sponsors expressed concern about the way FTA has 

developed and implemented changes to the New Starts process. For 

example, 14 of the 26 project sponsors with whom we spoke said that they 

have generally not been given an opportunity to offer input into prospective 

changes before they are implemented. Many project sponsors noted that 

the March “Dear Colleague” letter was a step in the right direction in that it 

was one of the first times since the last rulemaking that FTA had sought 

2765 Fed. Reg. 76864 (Dec. 7, 2000). The Federal Transit Act of 1998, within TEA-21, required 

FTA to publish regulations on the manner in which proposed projects will be evaluated and 

rated.
Page 28 GAO-05-674 Public Transportation

their input on proposed changes. However, five project sponsors 

commented that FTA did not give them sufficient time to review and 

comment on the proposed changes. In addition, FTA did not publish these 

changes in the Federal Register and provide at least 30 days’ notice, the 

minimum time typically required when changes are subject to the 

Administrative Procedure Act. Congressional committees have also 

expressed concerns about the transparency by which FTA makes changes 

to the evaluation and rating process, as shown by the bills to reauthorize 

surface transportation programs—introduced in early 2005—that offer a 

more formalized approach for providing notice to and soliciting comment 

from project sponsors.28 In particular, the House reauthorization bill would 

require that FTA provide notice and an opportunity for comment at least 60 

days before issuing any “nonregulatory substantive changes.”29 The Senate 

proposal states that FTA should issue periodic descriptions of the rating 

criteria and allow for public comment.30 (See app. IV for information about 

other changes proposed by the House and Senate.) 

Project sponsors offered a number of suggestions for improving FTA’s 

communication about changes to the New Starts process. For example, 

nine project sponsors told us that FTA should provide them with an 

opportunity to offer input into a change before it is made. Thirteen project 

sponsors mentioned that FTA should provide them with more lead time 

when the agency requires them to implement a change. For example, a 

number of project sponsors expressed concern that the recent technical 

changes to the cost-effectiveness calculation announced in April 2005 were 

made too close to when New Starts information is due—June for travel 

forecasts and “make the case” documents and August for the remaining 

application materials.31 In addition, eight project sponsors expressed that 

FTA should develop a standard schedule for when it announces and 

implements changes to the New Starts process. For example, one project 

sponsor suggested that FTA announce all changes at its New Starts 

roundtable a year before the changes are to be implemented.

28At the time this report went to print, the House and Senate were in conference and no 

conference report was available.

29H.R. 3, Sec. 3031, 109th Cong. (2005).

30151 Cong. Rec. S5668 (daily ed. May 20, 2005).

31FTA cited the delay in the implementation of the TSUB measure as an example of FTA 

providing additional time for project sponsors to comply with a change.
Page 29 GAO-05-674 Public Transportation

Our previous body of work on organizational transformation32 indicates 

that communication with stakeholders should be a top priority for any 

agency, is most effective when done early and often in any process, and is 

central to forming the partnerships that are needed to develop and 

implement an organization’s strategies. An effective communication 

strategy should facilitate an honest two-way exchange with, and allow for 

feedback from, stakeholders. This communication is central to forming the 

effective internal and external partnerships that are vital to a program’s 

success. For the past 2 years, FTA officials have announced at the 

roundtables that they are planning to develop and implement a strategy for 

improving communication among FTA offices and between FTA and 

project sponsors. FTA officials have told us that the strategy could include 

providing a single FTA point of contact for project sponsors and improving 

the distribution of policy, guidance, and procedures, perhaps using tools 

such as a listserve or webinar, as it did when it sought comments from 

project sponsors on the recent cost-effectiveness changes.33 FTA has 

implemented new communications tools, such as the webinar, but has not 

developed a comprehensive communications strategy.

New Starts Measures 

Have Evolved Over 

Time, but Not All 

Measures Count 

Toward a Project’s 

Rating

Many of the measures FTA uses to evaluate and rate New Starts projects 

predate TEA-21 and have evolved over time. In developing these measures, 

FTA has historically sought industry input by way of formal rulemaking as 

well as outreach sessions, workshops, and reports. Although both TEA-21 

and FTA’s current New Starts program regulations emphasize the 

importance of using a multiple-measure approach for evaluating projects, 

FTA assigns a 50 percent weight to both the cost-effectiveness and the land 

use criteria when developing the project justification summary rating. The 

other three project justification criteria are not weighted, although the 

mobility improvements criterion is used as a “tie-breaker” when the 

average of the cost-effectiveness and land use ratings falls equally between

32See GAO, Highlights of a GAO Forum: Mergers and Transformation: Lessons Learned 

for a Department of Homeland Security and Other Federal Agencies, GAO-03-293SP

(Washington, D.C.: Nov. 14, 2002).

33A webinar is a seminar or workshop that is conducted electronically over the World Wide 

Web. A listserve is an electronic mailing list that allows subscribers to send and receive 

information on a particular topic. 
Page 30 GAO-05-674 Public Transportation

two ratings (e.g., between “medium” and “medium-high”).34 According to 

FTA officials, FTA does not use these criteria because the underlying 

measures have weaknesses that diminish their use in distinguishing among 

projects. Project sponsors we interviewed offered suggestions for 

improving all of the project justification measures. 

Congress Directed FTA to 

Use Multiple Criteria in 

Evaluating and Rating 

Projects

Through the Intermodal Surface Transportation Efficiency Act of 1991 

(ISTEA) and TEA-21, Congress has directed FTA to use multiple criteria in 

evaluating and rating New Starts projects. In particular, TEA-21 identifies a 

series of financial and project justification criteria that reflect a broad 

range of benefits and effects of the proposed projects. The financial criteria 

include the share of non-New Starts funding and the capital and operating 

finance plans. The project justification criteria identified by TEA-21 include 

mobility improvements, cost-effectiveness, operating efficiencies, and 

environmental benefits. TEA-21 also identifies several additional statutory 

“considerations” to the evaluation process, including land use issues. TEA21 directs FTA to “evaluate and rate the project as ‘highly recommended,’ 

‘recommended,’ or ‘not recommended,’ based on...the project justification 

criteria,” among other things.35 FTA has recognized and acknowledged the 

congressional intent for New Starts projects to be evaluated using multiple 

measures. For instance, in a January 2005 report to Congress, FTA states 

that it is “clear that Congress intends FTA to evaluate projects based on 

more than cost-effectiveness criteria” and that the “statutory framework is 

consistent with the concept that a wide range of benefits should be 

considered in evaluating projects.”36

FTA also has endorsed the concept of using multiple criteria to evaluate 

and rate New Starts projects and FTA’s New Starts regulations set forth a 

multiple measure evaluation process. The New Starts regulations state that 

“FTA will combine the ratings for each of the financial rating factors and 

project justification criteria into overall ‘finance’ and ‘justification’ 

ratings.... These ratings will then be combined into the single, overall 

34Specifically, when mobility improvements are rated “low,” the summary rating will “round 

down” to the lower of the two ratings; for all other mobility improvement ratings, the rating 

is “rounded up” to establish the summary project justification rating.

3549U.S.C. 5309 (e)(6).

36U.S. Department of Transportation, Federal Transit Administration, “Report to Congress 

on Evaluating New Starts Projects,” January 3, 2005, p. 6.
Page 31 GAO-05-674 Public Transportation

project ratings.”37 Further, in response to a comment on the costeffectiveness measure in the proposed New Starts regulations, FTA stated 

the following:

“It is important to note that the measure for cost-effectiveness is not intended to be a single, 

stand-alone indicator of the merits of a proposed new starts project. It is but one part of the 

multiple measure method that FTA uses to evaluate project justification under the statutory 

criteria. While cost-effectiveness is an important consideration, so are mobility 

improvements, environmental benefits, and the other factors described both in TEA-21 and 

elsewhere in this rule.”38

FTA has repeated the importance of using a multiple measure approach in 

many reports and other documents since then, including its annual reports 

to Congress. The New Starts regulations identify the measures FTA will use 

to evaluate projects from the project justification criteria outlined in TEA21.39 Figure 5 shows the project justification criteria identified by TEA-21 

and the associated measures identified by FTA in the New Starts 

regulations. (See app. V for more detail on these measures.)

3765 Fed. Reg. 76875 (Dec. 7, 2000).

3865 Fed. Reg. 76873 (Dec. 7, 2000).

39For the financial rating, the criteria also serve as the measures.
Page 32 GAO-05-674 Public Transportation

Figure 5: Criteria and Measures for Evaluating Projects, as Outlined in TEA-21 and FTA’s New Starts Program Regulations

a

Other factors can include environmental justice and equity issues, economic development initiatives, 

innovative financing, etc.

b

TSUB = Transportation System User Benefits.

FTA Used Industry Input to 

Develop Measures for All 

Criteria Identified in TEA-21

The measures FTA uses to evaluate and rate New Starts projects have 

evolved over time, beginning years before TEA-21, through an iterative 

process involving Congress and the transit industry. FTA (then known as 

UMTA) introduced the first system for rating New Starts projects in 1984. 

At that time, projects were rated on cost-effectiveness (cost per new rider) 

and local financial commitment. Through ISTEA in 1991, Congress added 

mobility improvements, environmental benefits, and operating efficiencies 

Overall project rating

Other factorsa

Operating finance

plan

Capital finance

plan

Mobility

improvements

Operating

efficiencies Cost-effectiveness Land use

TSUBb per project

passenger mile

Change in regional

pollutant emissions

System operating cost

per passenger mile

Incremental cost per

hour of TSUBb

Employment near

stations

Change in regional

energy consumption

Low-income

households near

stations

EPA's air quality

designation

Existing land use

Transit supportive

plans and policies

Performance and

impact of policies

Environmental

benefits

Share of non-New

Starts funding

Project justification summary rating Financial commitment summary rating

Source: FTA.
Page 33 GAO-05-674 Public Transportation

to the list of criteria FTA should use to evaluate projects and also added 

land use policies as an additional factor for consideration.

FTA circulated a policy paper in 1994, asking for public comment on its 

proposed measures and procedures for assessing projects to address the 

requirements laid out in ISTEA. The agency received 31 responses from 

transit operators, metropolitan planning organizations, state departments 

of transportation, and other interested parties. FTA used these responses in 

finalizing its criteria and measures in a notice published in 1996 in the 

Federal Register. In the 1994 policy paper, FTA also solicited comments on 

the appropriateness of using a multiple-measure method for evaluating 

projects. Respondents generally agreed that this was appropriate, although 

they were split on how (or whether) the various criteria should be 

weighted. FTA formally adopted the multiple-measure approach in 1996.

TEA-21 required FTA to issue regulations for the evaluation and rating 

process, and FTA used that rulemaking opportunity to revise several of the 

project justification measures. Before and during the rulemaking process, 

FTA conducted outreach sessions around the country, soliciting comments 

on its processes and procedures for managing the New Starts program. FTA 

issued a Notice of Proposed Rulemaking in 1999 and received comments 

from 41 individuals and organizations. In response to the comments, FTA 

made several changes to the project justification measures. For example, 

many of these commenters objected to the “cost per new rider” measure 

for cost-effectiveness, saying that the focus on new riders ignores benefits 

provided to other riders, which may bias the measure against cities with 

“mature” transit systems. In response, FTA replaced it with the incremental 

cost per hour of TSUB measure (to capture benefits to both new and 

existing riders). The agency also added a mobility improvements measure 

for employment near stations to complement the existing low-income 

households near stations measure in response to industry comments that a 

system that is located near low-income households is of little use to 

residents unless it can also provide access to employment and other 

activity centers. 

Since issuing the regulations, FTA has continued efforts to fine-tune and 

improve some of the project justification measures. For example, FTA 

convened a panel of experts from the Urban Land Institute to discuss the 

land use measures and is seeking industry input on possible changes. FTA’s 

Strategic Business Plan for Fiscal Year 2005 includes deliverables to (1) 

develop a land use measure that is more quantifiable, offers a better basis 

for distinguishing among projects, and provides grantees information with 
Page 34 GAO-05-674 Public Transportation

which to improve their projects and (2) develop a methodology for 

measuring the congestion relief benefits of New Start projects.40 Both are 

scheduled to be completed by summer 2005. FTA officials told us that the 

fiscal year 2005 program plan included research funds for these efforts. In 

addition, as discussed previously, FTA recently instituted technical 

modifications to the cost-effectiveness measure.

FTA Does Not Use All 

Project Justification Criteria 

in Determining Ratings 

Because of Perceived 

Weaknesses in the Measures

Despite the requirement to use multiple measures, FTA does not use three 

of the five project justification criteria in calculating a project’s rating. 

Specifically, FTA currently assigns a weight of 50 percent each to the costeffectiveness and land use criteria; the other three project justification 

criteria are not assigned weights (see fig. 6). In its annual report for fiscal 

year 2006, FTA stated that it assigns individual ratings for the other three 

project justification criteria and reports them in the annual report, but 

these ratings “are not considered in the determination of an overall project 

justification rating.”41 FTA does, however, use all three financial 

commitment criteria in developing a project’s rating.

40The current mobility improvements and cost-effectiveness measure (i.e., TSUB) does not 

include highway congestion relief benefits.

41The rating for the mobility improvements may be used as a tie-breaker between costeffectiveness and land use ratings—that is, a low mobility improvements rating will round 

down the summary rating and a mobility improvements rating above a low will cause the 

summary rating to be rounded up. However, FTA officials told us that ties have been rare in 

the last several years. The “other” factors will also be considered if there is a compelling 

reason to do so; however, an FTA official told us that to the best of his knowledge these 

other factors have never changed a project’s rating.
Page 35 GAO-05-674 Public Transportation

Figure 6: Weights Used to Determine Project Justification and Financial Summary 

Ratings for New Starts Projects

Note: Numbers do not add to 100 due to rounding.

FTA officials told us that they do not use the mobility improvements, 

environmental benefits, and operating efficiencies criteria in determining 

the project justification summary rating because the measures do not, as 

currently structured, provide meaningful distinctions among competing 

New Starts projects. Many project sponsors we interviewed had similar 

views, noting that individual projects are too small to have much impact on 

the whole region or the whole transit system. For example, one of the 

environmental benefits measures requires project sponsors to measure the 

project’s impact on the annual number of tons of emissions forecast for the 

region for various pollutants. FTA officials also said that they do not assign 

weight to the mobility improvements measures in determining the project 

justification rating because they believe that the employment and lowincome household measures do not meaningfully distinguish among 

projects, and the user benefits are already captured in the costOverall project rating

Cost-effectiveness

Share of non-New

Starts funding

(20%) 

Operating finance

plan (30%)

Capital finance

plan (50%)

Incremental

cost per hour of

TSUB (50%)

Change in

regional pollutant

emissions (17%)

Change in

regional energy

consumption (17%)

EPA's air quality

designation (17%)

Land use

Project justification summary rating Financial commitment summary rating

Source: GAO presentation of FTA data.
Page 36 GAO-05-674 Public Transportation

effectiveness measure. Therefore, to count the user benefits as part of the 

mobility improvements would result in a double-counting of the benefits.42

In contrast, FTA officials told us that the cost-effectiveness and land use 

measures help to make meaningful distinctions among projects. For 

example, according to FTA, existing transit supportive plans and policies 

demonstrate an area’s commitment to transit projects and are a strong 

indicator of a project’s future success. 

Because FTA officials believe that these project justification measures do 

not provide meaningful distinctions among projects and are not factored 

into a project’s rating, FTA does not stringently evaluate the projects on the 

associated criteria. For instance, according to FTA’s New Starts reporting 

instructions, every project must submit data on operating efficiencies and 

automatically receives a score of medium on that criterion. Similarly, a 

project that is in a nonattainment area for a pollutant and that 

demonstrates a projected decrease in that pollutant gets a high 

environmental benefits rating, while a project in an attainment area that 

demonstrates a decrease gets a medium environmental benefits rating.43

The New Starts regulations do not specify the weights that should be 

assigned to each project justification criterion. FTA sought industry input 

on whether there should be a weighting system in the last rulemaking 

process; however, according to FTA officials, the agency did not receive 

input that was useful to inform its policy. Consequently, the regulations are 

silent on the weights that should be assigned to each criterion and do not 

prohibit FTA from treating various criteria as more important than other 

criteria. FTA instituted its current weighting system with the fiscal year 

2004 evaluation cycle after determining that the operating efficiencies, 

environmental benefits, and mobility improvements measures do not 

effectively distinguish among projects and that there is overlap among the 

42For more information on double-counting the benefits of transportation investments, see 

GAO, Highway and Transit Investments: Options for Improving Information on Projects’ 

Benefits and Costs and Increasing Accountability for Results, GAO-05-172 (Washington, 

D.C.: Jan. 24, 2005).

43The U.S. Environmental Protection Agency designates each region as in attainment, 

nonattainment, or maintenance—reflecting current compliance with the National Ambient 

Air Quality Standards under the Clean Air Act—for transportation-related pollutants 

including ozone, carbon monoxide, particulate matter, and nitrogen oxides. Geographic 

areas that have levels of a pollutant above those allowed by the standard are called 

nonattainment areas. Areas that did not meet the standard for a pollutant in the past but 

have reached attainment and met certain procedural requirements are known as 

maintenance areas.
Page 37 GAO-05-674 Public Transportation

mobility and cost-effectiveness measures. Because the regulations do not 

set forth the weights that should be assigned to each criterion, FTA did not 

amend the regulations when it instituted the current weighting system. 

Although FTA does not use all of the project justification criteria identified 

in TEA-21 to calculate project ratings, project sponsors must submit 

information for all five project justification criteria and FTA publishes this 

information for each project in the New Starts annual report. FTA officials 

offered several reasons for requiring project sponsors to continue to 

provide this information. First, TEA-21 requires FTA to consider these 

criteria when evaluating projects. Even though not all of the project 

justification criteria count toward the rating, FTA officials told us that they 

review and consider all five criteria and, therefore, are operating within the 

evaluation framework established in TEA-21 and the New Starts 

regulations. Second, FTA officials said that they believe that mobility 

improvements, environmental benefits, and operating efficiencies are 

important and should be a part of the evaluation process, even though FTA 

does not yet have measures for these criteria that help make distinctions 

among projects for the purpose of rating and funding decisions. No 

measures are specified in TEA-21, which only describes the criteria FTA 

should use to evaluate and rate projects, so FTA has the flexibility to revise 

the measures as needed. FTA officials stated that they continue to examine 

and pursue options to improve the measures and that FTA has committed 

approximately $500,000 of its fiscal year 2005 research funds to continue its 

work to improve the New Starts measures. The officials also said that they 

would wait to change these measures until legislation governing the New 

Starts program is reauthorized. They said that they will have to institute a 

formal rulemaking process at that time and would use that opportunity to 

solicit public comment on the New Starts evaluation and rating process. 

Third, FTA officials told us that information on these three criteria is 

presented in the annual report and may be useful to Congress and local 

decisionmakers. A number of project sponsors we spoke to expressed 

frustration that they must prepare and submit information for all the 

measures for the five project justification criteria even though some of this 

information does not contribute to the projects’ ratings.
Page 38 GAO-05-674 Public Transportation

Project Sponsors and 

Others Identified Strengths 

and Weaknesses of the 

Measures and Suggested 

Improvements

Project sponsors we interviewed, as well as FTA, the Department of 

Transportation’s Inspector General, and other industry experts have 

identified various strengths and weaknesses of the project justification 

measures used to evaluate the New Starts projects. For example, all of 

these sources acknowledge that FTA’s measure of cost-effectiveness does 

not capture benefits that accrue to highway users as more people switch to 

the improved transit system and highway congestion decreases. According 

to the department’s Inspector General, the omission of highway travel time 

savings means that the benefits from proposed projects that convey 

significant travel time savings for motorists are not recognized in the 

selection process. FTA noted that current local models used to estimate 

future travel demand for New Starts are incapable of estimating reliable 

highway travel time savings as a result of the New Starts project. According 

to the department’s Inspector General, this limitation is due to unreliable 

local data on highway speeds.44 FTA is working with the Federal Highway 

Administration to study ways to remedy this problem. Table 3 shows the 

strengths, weaknesses, and other concerns most commonly mentioned by 

the New Starts project sponsors we interviewed.

44“The Rating and Evaluation of New Starts Transit Systems,” Statement of the Honorable 

Kenneth M. Mead, Inspector General, U.S. Department of Transportation, before the 

Committee on Appropriations, Subcommittee on Transportation, Treasury and Independent 

Agencies, U.S. House of Representatives, April 28, 2004.
Page 39 GAO-05-674 Public Transportation

Table 3: Strengths, Weaknesses, and Other Concerns about New Starts Measures, as Identified by Project Sponsors

Criterion Measure Strengths Weaknesses Other concernsa

Mobility 

improvements

Transportation 

System User 

Benefits (TSUB) 

per project 

passenger mile

• Captures benefits to new and 

existing riders (3)

• Does not include highway 

benefits (4)

• Favors longer projects (3)

• Unclear what it means or 

how it is used (6)

• Difficult to explain (5)

• Difficult/time-consuming to 

calculate (4)

Employment near 

stations

• Measures the potential transit 

market (4)

• Does not include projected or 

planned employment (3)

• Does not capture benefits to 

the whole system or corridor 

(3)

Low-income 

households near 

stations

• Measures the potential transit 

market (7)

• Measures urban revitalization, 

equity, or social justice (3)

• Does not measure “choice” 

riders (e.g., commuters); 

does not reflect purpose of all 

transit systems (8)

• Does not really measure 

mobility (5)

Environmental 

benefits

Change in regional 

pollutant emissions

• Directly addresses pollution 

reduction (4)

• Individual project has a small 

impact on the region (13)

Change in regional 

energy 

consumption

No consensus on strengths • Individual project has a small 

impact on the region (10)

• This is not within the transit 

agency’s control (3)

Environmental 

Protection Agency’s 

air quality 

designation

• Helps determine where transit 

is most needed (3)

• Individual project has a small 

or no impact on the region’s 

designation (6)

• This is not within the transit 

agency’s control (6)

• Designation should not 

matter—all areas should 

be trying to improve air 

quality (3)

Operating 

efficiencies

System operating 

cost per passenger 

mile

• Understandable, simple, 

straightforward, reasonable 

(6)

• Individual project has small 

impact on systemwide 

efficiency (5)

• Incomplete by itself; needs 

context (3)

CosteffectivenessIncremental cost 

per hour of TSUB

• Captures/quantifies project 

benefits in one number for 

comparison (9)

• Reasonable, understandable 

(3)

• Improvement over old 

measure (3)

• Sensitive to variations in 

underlying assumptions (5)

• Does not include highway 

benefits (5)

• Does not account for other 

local goals or benefits (5)

• Does not include project’s 

impact on land use b (3)

• Complicated to calculate 

and explain (7)

• Thresholds/caps seem 

arbitrary (4)
Page 40 GAO-05-674 Public Transportation

Source: GAO.

Note: Numbers in parentheses indicate response frequency. This table only includes responses that 

were mentioned by at least 3 of the 26 project sponsors we interviewed. 

a

Project sponsors raised these other concerns during our discussions on the measures’ strengths and 

weaknesses.

b

For example, one project sponsor said that the measure does not account for local land use policies 

and the resulting development potential in the area, such as the impact of that city’s 20-year zoning 

plans.

c

This measure includes performance of land use policies and potential impact of transit project on 

regional land use.

In addition, in a recent report on the benefits and costs of transportation 

improvements, we identified challenges in measuring the benefits and 

costs of transit investments—some of which are relevant to the measures 

used by FTA to evaluate New Starts projects.45 For example, desirable 

changes in land use are indirect benefits of a transportation investment, 

which are difficult to forecast and quantify. We also reported that social 

benefits such as reductions in environmental costs—including reduced 

emissions—were difficult to quantify and value. Additionally, we reported 

that there is great variation in the models local transportation planning 

agencies use to develop travel forecasts (which underlie many of the New 

Starts measures), producing significant variation in forecast quality and 

limiting the ability to assess quality against the general state of practice. 

Some experts have also found that travel demand models tend to predict 

unreasonably bad conditions in the absence of a proposed highway or 

transit investment. In particular, travel forecasting does not contend well 

with land-use changes or effects on nearby roads or other transportation 

alternatives that result from transportation improvements or growing 

congestion. Before conditions get as bad as they are forecasted, people 

Land use Existing land use • Reflects current or future 

ridership (5)

• Demonstrates project’s 

benefits/need (3)

• Focuses on present, but 

project is built for the future 

(5)

• Subjective (3)

Transit supportive 

plans and policies

• Emphasizes link between land 

use and transit (8)

• Qualitative, difficult to 

document/measure (5)

Performance and 

impact of policies c

• Measures actual public local 

support for transit (3)

• Shows opportunity for 

expansion/development (3)

• Qualitative, subjective, vague 

(8)

(Continued From Previous Page)

Criterion Measure Strengths Weaknesses Other concernsa

45GAO-05-172.
Page 41 GAO-05-674 Public Transportation

make other changes, such as residence or employment changes, to avoid 

the excessive travel costs.46

Our previous work has stated that agencies successful in measuring 

performance had performance measures that, among other things, 

demonstrate results and cover multiple priorities. Specifically, successful 

measures (1) are aligned with agencywide goals and mission and are 

clearly communicated throughout the organization; (2) are clearly stated, 

with a name and definition that are consistent with the methodology used 

to calculate the measures; (3) have a measurable target; (4) are objective; 

(5) are reliable; (6) cover core program activities; (7) have limited overlap 

with other measures; (8) provide balance in ensuring that various priorities 

are covered; and (9) address governmentwide priorities, such as quality 

and cost of service. For example, measures that are not objective may 

result in performance assessments that are systematically over- or 

understated, and a lack of balance could create skewed incentives when 

measures overemphasize some goals.47 While these successful attributes 

were developed specifically for performance measures, they also could be 

useful in determining how to improve other types of measures, such as 

those FTA uses to evaluate and rate New Starts projects.

The sponsors of the 26 projects we interviewed had many suggestions for 

improving the project justification measures. These suggestions ranged 

from adding measures to the mobility improvements, environmental 

benefits, and land use criteria to changing the way in which operating 

efficiencies are calculated. The most commonly cited suggestions are listed 

in table 4, but we did not determine whether the suggestions were 

appropriate or feasible. FTA officials told us that they received limited 

suggestions for specific measures or methodologies for mobility 

improvements, environmental benefits, and operating efficiencies during 

the rulemaking process.

46FTA introduced the Summit software in the fiscal year 2004 rating cycle to improve the 

accuracy of local travel models used to support New Starts projects. According to FTA, 

Summit has provided a means to identify and diagnose travel forecasting problems related 

to assumptions regarding fare and service policies, regional transportation networks, land 

use, and economic conditions. The software has also helped ensure that local forecasts are 

utilizing comprehensive and up-to-date data on travel behavior and local transportation 

systems.

47See GAO, Tax Administration: IRS Needs to Further Refine Its Tax Filing Season 

Performance Measures, GAO-03-143 (Washington, D.C.: Nov. 22, 2002).
Page 42 GAO-05-674 Public Transportation

Table 4: Suggestions for Improving New Starts Measures, as Identified by Project Sponsors

Source: GAO.

Notes: Numbers in parentheses indicate response frequency. This table only includes responses that 

were mentioned by at least 3 of the 26 project sponsors we interviewed.

a

FTA announced it was adjusting the cost-effectiveness thresholds for inflation on April 29, 2005, after 

we had completed our interviews.

Conclusions TEA-21 and FTA’s New Starts regulations clearly state that New Starts 

projects should be evaluated and rated using multiple criteria. Further, the 

statute and regulations identify the project justification criteria that should 

be used in the evaluation process, including mobility improvements, 

environmental benefits, operating efficiencies, cost-effectiveness, and land 

use, as well as the financial commitment criteria that should be used in the 

evaluation process. The regulations also identify the measures that will be 

used to operationalize the criteria. Although FTA uses all three financial 

criteria, in practice, FTA uses only two of the project justification criteria—

cost-effectiveness and land use—to calculate a project’s overall rating. 

FTA’s reliance on two of the five project justification criteria, coupled with 

the recent cost-effectiveness practice for funding—which further 

emphasizes one criterion—is drifting away from the multiple-measure 

evaluation and rating process outlined in TEA-21 and the current New 

Starts regulations. According to FTA officials, FTA does not assign weights 

to environmental benefits, operating efficiencies, and mobility 

improvements because of weaknesses in the measures and the overlap of 

some measures that could result in double-counting of benefits. FTA has 

made notable progress in improving the measures for cost-effectiveness 

and land use, including seeking advice from experts and the transit 

industry and conducting pilot tests since the enactment of TEA-21. 

Area Suggestions

Mobility improvements • Add measures, such as population density, residential density, number of high-income households 

served, projected or planned employment near stations, retail and stadiums near stations, transitoriented development, accessibility, or number of new riders (10) 

Environmental benefits • Add measures or replace existing measures with movement toward a sustainable transit system, 

effect of project on automobile congestion, number of cars taken off the road, noise quality, 

preservation of open space, or other measures identified in the Environmental Impact Statement (4)

Operating efficiencies • Measure operating cost per passenger or per passenger hour instead of per passenger mile (3) 

Cost-effectiveness • Add measures, such as cost per new rider, in addition to the current measure of incremental cost 

per hour of Transportation System User Benefits (5)

• Adjust thresholds for inflationa

 (3)

Land use • No consensus on suggestions
Page 43 GAO-05-674 Public Transportation

However, given that FTA has been statutorily directed to also use 

environmental benefits, operating efficiencies, and mobility improvements 

in evaluating and rating projects, it is imperative that FTA either pay 

additional attention to improving these three criteria so that they can be 

more explicitly used in the evaluation process or explicitly demonstrate the 

linkages between these criteria and the measures used.

FTA has made a number of changes intended to enhance the rigor of the 

program over the past 6 years, and some of these changes, such as the 

Before and After study, risk assessment, and cost-effectiveness practice 

could help FTA hold project sponsors accountable for results and maximize 

the benefits of each dollar invested. However, FTA could improve the 

transparency of changes made to the New Starts program by giving project 

sponsors an opportunity to review and comment on any substantive 

changes before they are implemented. The Freedom of Information and 

Administrative Procedure Acts establish formal processes for notifying the 

public and making changes to federal programs, including soliciting 

comments about proposed changes. If FTA officials determine that a formal 

rulemaking process is unnecessary, FTA could still provide project 

sponsors an opportunity to review and comment on any substantive 

changes proposed for the New Starts program, potentially avoiding some of 

the implementation problems that have occurred in the past. In addition, 

the review and comment period could help FTA improve the proposed 

changes as well as gain industry buy-in and support for changes—elements 

that are critical for success. 

FTA could also strengthen its communication efforts by improving its Web 

site so that project sponsors view it as a viable source for obtaining 

information about changes to the New Starts program. The Web site could 

provide a central forum for comprehensive, up-to-date information on the 

New Starts program and could also be useful for publicizing FTA’s activities 

to improve the application, evaluation, rating, and oversight processes. 

Much of this information is already available on FTA’s Web site. However, 

the information that remains is scattered in different locations and many 

project sponsors told us that it was difficult to locate needed information. 

Making the information easier to find could help reduce confusion about 

the New Starts process.

Recommendations for 

Executive Action

To ensure that the New Starts regulations reflect FTA’s current evaluation 

and rating process, and to ensure that FTA’s New Starts evaluation process 

and policies are objective, transparent, and follow the intent of federal 
Page 44 GAO-05-674 Public Transportation

statute, we recommend that the Secretary of Transportation direct the 

Administrator, FTA, to take the following four actions:

• ensure that the agency’s regulations governing the New Starts 

evaluation and rating process reflect FTA’s current weighting practices 

for the criteria when the regulations are revised;

• improve the measures for evaluating New Starts projects so that all five 

project justification criteria can be used in determining a project’s 

overall rating, or provide a crosswalk in the agency’s New Starts 

regulations showing clear linkages between the criteria outlined in 

statute and the criteria and measures used in the rating process;

• publish future changes to the New Starts program in the Federal 

Register and subject future changes to the New Starts program to the 

rulemaking process or, at a minimum, a 30-day informal review and 

comment period, as appropriate. As part of this process, the agency 

should develop criteria for determining which changes should be 

subject to the rulemaking process, as outlined in federal statute, or to an 

informal review and comment period. At a minimum, these criteria 

could include changes that impose new reporting requirements or new 

analysis on project sponsors, changes to the principles used to 

recommend projects for funding, and changes to the weights assigned to 

the criteria used to evaluate and rate projects. The criteria should be 

communicated to Congress and to project sponsors and others in the 

transit community; and

• consolidate information and guidance related to the New Starts program 

in one location on the agency’s Web site and regularly review this 

information to ensure it is up to date and easy to access.

Agency Comments and 

Our Evaluation

We provided a draft of this report to the Department of Transportation for 

review and comment. Officials from the Department and FTA indicated that 

they generally agreed with the report’s findings, conclusions, and 

recommendations. FTA officials also provided technical clarifications, 

which we incorporated as appropriate.

We are sending copies of this report to congressional committees with 

responsibilities for transit issues; the Secretary of Transportation; the 
Page 45 GAO-05-674 Public Transportation

Administrator, Federal Transit Administration; and the Director, Office of 

Management and Budget. We also will make copies available to others 

upon request. In addition, this report will be available at no charge on 

GAO’s Web site at http://www.gao.gov.

If you or your staff have any questions on matters discussed in this report, 

please contact me at siggerudk@gao.gov. Contact points for our Offices of 

Congressional Relations and Public Affairs may be found on the last page 

of this report. GAO contacts and key contributors to this report are listed in 

appendix VI.

Katherine Siggerud

Director, Physical Infrastructure
Page 46 GAO-05-674 Public Transportation

Appendix I

Scope and Methodology ApApenednxidexiIs

To address our objectives, we reviewed the administration’s fiscal year 

2006 budget request, the Federal Transit Administration’s (FTA) annual 

New Starts report, FTA’s New Starts regulations, FTA’s 2004 and 2005 

reporting instructions for the New Starts program, federal statutes 

pertaining to the new Starts program, and previous GAO reports. We also 

interviewed FTA officials and representatives from the American Public 

Transportation Association, New Starts Working Group, and the 

Association of Metropolitan Planning Organizations. In addition, we 

attended FTA’s New Starts roundtables with project sponsors in New York 

and San Francisco in April and May 2005, respectively.

We also conducted semistructured interviews with project sponsors from 

the 26 projects that were evaluated and rated in the fiscal year 2006 

evaluation cycle (see table 5). These interviews were designed to gain 

project sponsors’ perspectives on a number of topics, including the manner 

in which FTA communicates changes to the New Starts application, 

evaluation, rating, and project development oversight processes; the 

impact of the changes that FTA has made to the application, evaluation, 

rating, and project development oversight processes since the fiscal year 

2001 evaluation cycle—the first full evaluation and rating cycle after the 

enactment of the Transportation Equity Act for the 21st Century (TEA-21); 

and the measures FTA uses to evaluate projects. To verify the clarity, length 

of time of administration, and understandability of the interview questions, 

as well as to determine whether respondents had sufficient knowledge and 

information to answer the questions, we pretested the questions with three 

project sponsors. We made changes to the content and format of the final 

set of interview questions as a result of these pretests. After conducting the 

interviews with sponsors from all 26 projects, we used a content analysis to 

systematically determine project sponsors’ views on key interview 

questions and identify common themes in project sponsors’ responses. Two 

analysts reached consensus on the coding of the responses, and a third 

reviewer was consulted in case of disagreements, to ensure that the codes 

were reliable.
Appendix I

Scope and Methodology

Page 47 GAO-05-674 Public Transportation

Table 5: Projects Contacted for Our Review

Sources: GAO and FTA.

Note: LRT = Light Rail Transit; MOS = Minimum Operable Segment

To ensure the reliability of information presented in this report, we 

interviewed FTA officials about FTA’s policies and procedures for 

compiling the New Starts annual reports, including FTA’s data collection 

and verification practices for New Starts information. Specifically, we 

asked them whether their policies and procedures had changed 

Location Project

Final design or proposed for full funding grant agreement

Charlotte South Corridor LRT

Las Vegas Resort Corridor Downtown Extension

New York City Long Island Rail Road East Side Access

Phoenix Central Phoenix/East Valley LRT

Pittsburgh North Shore LRT Connector

Raleigh-Durham Regional Rail System

Washington County Wilsonville to Beaverton Commuter Rail

Preliminary engineering

Boston Silver Line Phase III

Dallas Northwest/Southeast Light Rail MOS

Denver West Corridor LRT

Fort Collins Mason Transportation Corridor

Hartford New Britain-Hartford Busway

Los Angeles Mid-City/Exposition Corridor LRT

Miami North Corridor Metrorail Extension

Minneapolis-Big Lake Northstar Corridor Rail

New Orleans Desire Streetcar Line

New York City Second Ave. Subway MOS

Norfolk Norfolk LRT

Northern VA Dulles Corridor Metrorail Extension to Wiehle Ave.

Orange County Centerline LRT

Philadelphia Schuylkill Valley Metrorail

Portland South Corridor I-205/Portland Mall LRT

Salt Lake City Weber County to Salt Lake City Commuter Rail

San Diego Mid-Coast LRT Extension

San Francisco New Central Subway

Santa Clara County Silicon Valley Rapid Transit Corridor
Appendix I

Scope and Methodology

Page 48 GAO-05-674 Public Transportation

significantly since we reviewed them for our 2004 report on New Starts.1 

FTA officials told us that there were no significant changes in their data 

collection and verification policies and procedures for New Starts 

information. Therefore, we concluded that the FTA information presented 

is sufficiently reliable for the purposes of this report.

We conducted our work from November 2004 through May 2005 in 

accordance with generally accepted government auditing standards, 

including standards for data reliability.

1

GAO, Mass Transit: FTA Needs to Better Define and Assess Impact of Certain Policies on 

New Starts Program, GAO-04-748 (Washington, D.C.: June 25, 2004).
Page 49 GAO-05-674 Public Transportation

Appendix II

Projects with Existing FFGAs and Projects in 

Preliminary Engineering and Final Design in 

the Fiscal Year 2006 Cycle ApendxiI

Dollars in millions

State/ 

territory Location/project

Overall project 

rating/status

Fiscal year 2006

recommended

funding

Total New Starts funding

scheduled by FFGA or

requested by project

sponsors

Projects with existing full funding grant agreements (FFGAs)

CA Los Angeles—Metro Gold Line East Side 

Extension

FFGA $80.0 $490.7

CA San Diego—Mission Valley East Light Rail 

Transit (LRT) Extension

FFGA 7.7 330.0

CA San Diego—Oceanside-Escondido Rail 

Corridor

FFGA 12.2 152.1

CA San Francisco—Bay Area Rapid Transit 

Extension to San Francisco Airport

FFGA 81.9 750.0

CO Denver—Southeast Corridor LRT FFGA 80.0 525.0

IL Chicago—Douglas Branch Reconstruction FFGA 45.2 320.1

IL Chicago—North Central Corridor Commuter 

Rail

FFGA 20.6 135.3

IL Chicago—Ravenswood Line Extension FFGA 40.0 245.5

IL Chicago—South West Corridor Commuter 

Rail

FFGA 7.3 103.0

IL Chicago—Union Pacific West Line Extension FFGA 14.3 80.8

MD Baltimore—Central LRT Double-Track FFGA 12.4 120.0

NJ Northern New Jersey—Hudson-Bergen 

Minimum Operable Segment (MOS)-2

FFGA 100.0 500.0

OH Cleveland—Euclid Corridor Transportation 

Project

FFGA 24.8 82.2

OR Portland—Interstate MAX LRT Extension FFGA 18.1 257.5

PR San Juan—Tren Urbano FFGA 10.2 307.4

WA Seattle—Central Link Initial Segment FFGA 80.0 500.0

Subtotal 634.6 4,899.6

Projects recommended for FFGAs

AZ Phoenix—Central Phoenix/ East Valley LRT Recommended 90.0 587.2

NC Charlotte—South Corridor LRT Recommended 55.0 192.9

NY New York—Long Island Rail Road East Side 

Access

Highly recommended 390.0 2,632.0

PA Pittsburgh—North Shore LRT Connector Recommended 55.0 217.7

Subtotal 590.0 3,629.8
Appendix II

Projects with Existing FFGAs and Projects in 

Preliminary Engineering and Final Design in 

the Fiscal Year 2006 Cycle

Page 50 GAO-05-674 Public Transportation

Projects in final design

MO Kansas City—Southtown Bus Rapid Transit 

(BRT)

Exempt 12.3

NC Raleigh-Durham—Regional Rail System Not rated 416.1

NV Las Vegas—Resort Corridor Downtown 

Extension

Not recommended 159.7

OR Washington County—Wilsonville to 

Beaverton Commuter Raila

Recommended 51.8

TN Nashville—East Corridor Commuter Rail Exempt 23.5

Subtotal 663.4

Projects in preliminary engineering

AK Wasilla—South Wasilla Track Realignment Exempt N/A

CA Los Angeles—Exposition Corridor LRT Not rated 276.0

CA Orange County—CenterLine LRT Not rated 482.8

CA San Diego—Mid-Coast LRT Extensiona Recommended 65.8

CA San Francisco—Central Subway Recommended 762.2

Projects in preliminary engineering

CA Santa Clara County—Silicon Valley Rapid 

Transit Corridor

Not recommended 973.0

CO Denver—West Corridor LRTa Recommended 249.0

CO Fort Collins—Mason Transportation Corridor Not recommended 33.0

CT Hartford—New Britain-Hartford Busway Not recommended 168.5

DE Wilmington—Wilmington to Newark 

Commuter Rail Improvements

Exempt 24.9

FL Miami—North Corridor Metrorail Extension Not rated 421.3

FL Tampa Bay—Tampa Bay Regional Railb Not recommended 727.7

LA New Orleans—Desire Streetcar Line Not recommended 68.7

MA Boston—Silver Line Phase III Recommended 468.3

MN Minneapolis-Big Lake—Northstar Corridor 

Rail

Not recommended 132.5

NY New York—Second Avenue Subway MOSa Highly recommended 1,300.0

OR Portland—South Corridor I-205/Portland Mall 

LRT

Recommended 296.2

PA Harrisburg—CORRIDORone Rail MOS Exempt 24.9

PA Philadelphia—Schuylkill Valley MetroRail Not recommended 2,071.1

(Continued From Previous Page)

Dollars in millions

State/ 

territory Location/project

Overall project 

rating/status

Fiscal year 2006

recommended

funding

Total New Starts funding

scheduled by FFGA or

requested by project

sponsors
Appendix II

Projects with Existing FFGAs and Projects in 

Preliminary Engineering and Final Design in 

the Fiscal Year 2006 Cycle

Page 51 GAO-05-674 Public Transportation

Source: FTA.

Note: Totals may not add due to rounding.

a

Projects proposed for potential federal funding commitments outside of full funding grant agreements.

b

This project has since withdrawn from the New Starts application process.

RI Providence—South County Commuter Rail Exempt 24.9

TX Dallas—Northwest/Southeast Light Rail 

MOSa

Recommended 700.0

TX El Paso—Sun Metro Area Rapid Transit 

Starter Line

Exempt N/A

UT Salt Lake City—Weber County to Salt Lake 

City Commuter Raila

Recommended 466.8

VA Norfolk—Norfolk LRT Not rated 100.7

VA Northern Virginia—Dulles Corridor Metrorail 

Project - Extension to Wiehle Avenue

Recommended 760.5

Subtotal 10,598.8

Total 1,224.6 19,791.6

(Continued From Previous Page)

Dollars in millions

State/ 

territory Location/project

Overall project 

rating/status

Fiscal year 2006

recommended

funding

Total New Starts funding

scheduled by FFGA or

requested by project

sponsors
Page 52 GAO-05-674 Public Transportation

Appendix III

Status of Previous GAO Recommendations for 

Improving the New Starts Evaluation Process ApendxiI

Report Recommendation Status

GAO/T-RCED-00-104 The Federal Transit Administration (FTA) should 

prioritize the projects it rates as highly 

recommended or recommended and ready to 

receive New Starts funds.

FTA officials told us that their recently implemented 

cost-effectiveness practice was partly in response to 

this recommendation. FTA will generally not 

recommend funding for a project that does not 

achieve at least a “medium” cost-effectiveness rating. 

GAO-01-987 FTA should make commitment authority allocated to 

projects for which the federal funding commitments 

have been withdrawn available for all projects 

competing for New Starts funding (i.e., “release” the 

funding).

In fiscal year 2003, FTA released $157 million in 

commitment authority reserved for a Los Angeles 

Mid-City subway project that had been suspended for 

more than 3 years.

GAO-03-701 FTA should amend its regulations governing the 

level of federal funding share for projects to reflect 

its policy of favoring projects that request less than 

60 percent New Starts funding.

FTA disagreed with this recommendation, arguing 

that its preference policy is not a legally binding 

requirement and therefore should not be reflected in 

the New Starts regulations. However, the agency did 

change the way it characterized the policy in its fiscal 

year 2006 New Starts annual report. This document 

states that FTA “generally” will not recommend 

funding for projects that request more than a 60 

percent New Starts share of funding.

GAO-03-701 FTA should 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 

Transportation System User Benefits measure.

FTA completed several actions and has other ongoing 

efforts to address the recommendation. (1) FTA 

provided additional guidance in its reporting 

instructions, clarifying the practices that must be 

followed in preparing the Transportation System User 

Benefits measure. (2) FTA provided additional 

guidance in July 2003, on how it would evaluate the 

measures in the fiscal year 2005 rating process. (3) 

FTA held several special workshops for transit 

agencies on Transportation System User Benefits, 

travel forecasting, and development of transit 

alternatives. (4) FTA initiated a proactive outreach to 

project sponsors to help them prepare and evaluate 

the measure, identifying weaknesses in their 

proposed measure and suggesting improvements. (5) 

FTA has a number of ongoing planned improvements 

to its guidance, including developing a users guide to 

the Summit software, developing case studies and 

exemplary practices, and updating its guidance on 

travel forecasting for New Starts projects.

GAO-04-748 FTA should clearly explain the basis on which it 

decides which projects will be recommended for 

funding outside of full funding grant agreements, 

and what projects must do to qualify for such a 

recommendation. These explanations should be 

included in FTA’s annual New Starts report and 

other published New Starts guidance.

In its fiscal year 2006 New Starts report, FTA 

described its criteria for recommending projects for 

funding outside of full funding grant agreements. 

These criteria include projects that were in or nearing 

final design, received overall highly recommended or 

recommended ratings, and had cost-effectiveness 

ratings above a “low.” 
Appendix III

Status of Previous GAO Recommendations 

for Improving the New Starts Evaluation 

Process

Page 53 GAO-05-674 Public Transportation

Source: GAO.

GAO-04-748 FTA should examine the impact of its preference 

policy on projects currently in the evaluation 

process, as well as projects in the early planning 

stages, and examine whether its policy results in 

maximizing New Starts funds and local 

participation.

FTA has not implemented this recommendation.

(Continued From Previous Page)

Report Recommendation Status
Page 54 GAO-05-674 Public Transportation

Appendix IV

Key New Starts Provisions Contained in 

House and Senate Reauthorization Bills ApendxiIV

Sources: H.R. 3, 109th Cong. (2005), and 151 Cong. Rec. S5667-S5669 (daily ed. May 20, 2005).

Provision Senate proposal House proposal

Streamline the New 

Starts evaluation 

process for projects 

under $75 million

• Allows the Secretary of Transportation discretion to 

develop a streamlined evaluation process for projects 

requesting less than $75 million in New Starts funds.

• Eliminates the “exempt” classification for projects 

requesting less than $25 million in New Starts funding 

and allows FTA to analyze and rate all projects through 

a streamlined process.

• Establishes a “Small Starts” program for projects 

requesting between $25 million and $75 million in New 

Starts funding, with a total project cost of less than 

$200 million. These projects would be evaluated 

through a streamlined rating process.

• Maintains the “exempt” classification for projects 

requesting less than $25 million in New Starts funding.

Expand the 

definition of eligible 

projects

• Allows nonfixed-guideway transit projects (e.g., bus 

rapid transit operating in nonexclusive lanes) 

requesting less than $75 million to be eligible for New 

Starts funding.

• Expands New Starts funding eligibility to include 

nonfixed-guideway projects with a majority of fixedguideway components seeking between $25 million 

and $75 million as part of its “Small Starts” initiative. 

Change the rating 

categories

• Revises the current rating system (that uses “highly 

recommended,” “recommended,” and “not 

recommended” ratings) to five levels of ratings: “high,” 

“medium-high,” “medium,” “medium-low,” and “low.”

• Maintains the current rating system.

Maintain a maximum 

federal New Starts 

share at 80 percent

• Maintains the maximum New Starts share at 80 

percent for individual projects (in contrast to the 

administration’s reauthorization proposal, which would 

lower the maximum New Starts share to 50 percent).

• Maintains the maximum New Starts share at 80 

percent for individual projects.

• Specifically prohibits FTA from requiring a nonfederal 

share that is more than 20 percent of the project’s cost.

Formalize 

communication 

about changes

• Requires FTA to issue periodic descriptions of the 

review and evaluation process and criteria and allow 

for public comment.

• Requires FTA to provide notice and an opportunity for 

comment at least 60 days before issuing any 

nonregulatory substantive changes.
Page 55 GAO-05-674 Public Transportation

Appendix V

FTA’s Project Justification Measures for 

Evaluating and Rating New Starts Projects ApendxiV

Source: FTA.

Criterion Measure Definition

Mobility improvements Transportation System User Benefits per 

project passenger mile (normalized travel time 

savings)

Annual Transportation User Benefits (user expenditure 

savings between New Starts baseline and build 

alternatives) per forecasted project passenger mile, 

divided by total Transportation System User Benefits 

per passenger mile 

Low-income households served Estimated number of low-income households (i.e., 

households below the poverty level) located within 1/2 

mile of boarding points (transit stations) on the 

proposed New Starts project

Employment near stations Number of jobs within 1/2 mile of the New Starts 

project’s proposed transit stations

Environmental benefits Change in criteria pollutant/precursor 

emissions

Annual number of tons of emissions forecast for the 

region—comparing conditions under the New Starts 

investment to the New Starts baseline alternative—for 

carbon monoxide, particulate matter, nitrogen oxides, 

volatile organic compounds, and carbon dioxide

Change in regional energy consumption Net impact on energy savings as a result of changes in 

automobile and commercial travel in the region, offset in 

part by the energy requirements for operation of the 

proposed transit investment, measured in British 

Thermal Units

Current Environmental Protection Agency 

regional air quality designation

U.S. Environmental Protection Agency’s current air 

quality designation for the region, reflecting current 

compliance with the National Ambient Air Quality 

Standards, reported as attainment, nonattainment, or 

maintenance for transportation-related pollutants 

including ozone, carbon monoxide, particulate matter, 

and nitrogen oxides

Operating efficiencies Operating cost per passenger mile Change in systemwide operating cost per passenger 

mile in the forecast year, comparing the New Starts 

build alternative to the baseline alternative

Cost-effectiveness Incremental cost of Transportation System 

User Benefits

Annualized capital and operating costs divided by 

Transportation System User Benefits (annual user 

expenditure savings) of the New Starts project as 

compared to the baseline

Land use Existing land use Includes corridor and station area development, 

character (i.e., residential, commercial, mixed-use), 

pedestrian facilities, and parking supply

Transit supportive plans and policies Includes growth management, transit supportive 

corridor policies, supportive zoning regulations near 

transit stations, and tools to implement land use policies

Performance and impact of policies Includes performance of land use policies and potential 

impact of transit project on regional land use
Page 56 GAO-05-674 Public Transportation

Appendix VI

GAO Contacts and Staff Acknowledgments ApendxiVI

GAO Contacts Katherine Siggerud, (202) 512-2834, siggerudk@gao.gov

Nikki Clowers, (202) 512-4010, clowersa@gao.gov

Staff 

Acknowledgments

In addition to the individuals named above, other key contributors to this 

report were Bert Japikse, Jessica Lucas-Judy, Sara Ann Moessbauer, and 

Gary Stofko.
Page 57 GAO-05-674 Public Transportation

Related GAO Products

Highway and Transit Investments: Options for Improving Information 

on Projects’ Benefits and Costs and Increasing Accountability for 

Results. GAO-05-172. Washington, D.C.: January 24, 2005.

Mass Transit: FTA Needs to Better Define and Assess Impact of Certain 

Policies on New Starts Program. GAO-04-748. Washington, D.C.: June 25, 

2004.

Mass Transit: FTA Needs to Provide Clear Information and Additional 

Guidance on the New Starts Ratings Process. GAO-03-701. Washington, 

D.C.: June 23, 2003.

Mass Transit: Status of New Starts Program and Potential for Bus Rapid 

Transit Projects. GAO-02-840T. Washington, D.C.: June 20, 2002.

Mass Transit: FTA’s New Starts Commitments for Fiscal Year 2003. GAO02-603. Washington, D.C.: April 30, 2002.

Mass Transit: FTA Could Relieve New Starts Program Funding 

Constraints. GAO-01-987. Washington, D.C.: August 15, 2001.

Mass Transit: Implementation of FTA’s New Starts Evaluation Process 

and FY 2001 Funding Proposals. GAO/RCED-00-149. Washington, D.C.: 

April 28, 2000.

Mass Transit: Challenges in Evaluating, Overseeing, and Funding Major 

Transit Projects. GAO/T-RCED-00-104. Washington, D.C.: March 8, 2000.

Mass Transit: “Mobility Improvements” Is One of Many Factors Used to 

Evaluate Mass Transit Projects. GAO/RCED-00-6R. Washington, D.C.: 

October 15, 1999.

Mass Transit: Status of New Starts Transit Projects With Full Funding 

Grant Agreements. GAO/RCED-99-240. Washington, D.C.: August 19, 1999.

Mass Transit: FTA’s Progress in Developing and Implementing a New 

Starts Evaluation Process. GAO/RCED-99-113. Washington, D.C.: April 26, 

1999.

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Automated answering system: (800) 424-5454 or (202) 512-7470

Congressional 

Relations

Gloria Jarmon, Managing Director, JarmonG@gao.gov (202) 512-4400

U.S. Government Accountability Office, 441 G Street NW, Room 7125 

Washington, D.C. 20548

Public Affairs Paul Anderson, Managing Director, AndersonP1@gao.gov (202) 512-4800

U.S. Government Accountability Office, 441 G Street NW, Room 7149 

Washington, D.C. 20548