GAO

United States General Accounting Office

Report to Congressional Committees

April 2000 MASS TRANSIT

Implementation of

FTA’s New Starts

Evaluation Process

and FY 2001 Funding

Proposals

GAO/RCED-00-149

Page 1 GAO/RCED-00-149 Mass Transit

Contents

Letter 3

Appendixes Appendix I: New Starts Criteria and Related Performance

Measures 20

Appendix II: FTA’s Fiscal Year 2001 New Starts Ratings and

Funding Recommendations 21

Tables Table 1: Projects Recommended for Funding in Fiscal Year 2001 13

Table 2: Summary of New Starts Evaluation Criteria and

Performance Measures 20

Figures Figure 1: The FTA New Starts Evaluation and Rating Process 8

Figure 2: TEA-21 Commitment Authority for New Starts Projects and

DOT’s Fiscal Year 2001 New Starts Budget Request 17
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Page 3 GAO/RCED-00-149 Mass Transit

United States General Accounting Office

Washington, D.C. 20548

Resources, Community, and

Economic Development Division

B-285084 Letr

April 28, 2000

The Honorable Phil Gramm

Chairman

The Honorable Paul S. Sarbanes

Ranking Minority Member

Committee on Banking, Housing,

and Urban Affairs

United States Senate

The Honorable Bud Shuster

Chairman

The Honorable James L. Oberstar

Ranking Democratic Member

Committee on Transportation and Infrastructure

House of Representatives

Since the early 1970s, the federal government has provided a large share of

the nation’s capital investment in urban mass transportation. Much of this

investment has come through the Federal Transit Administration’s (FTA)

New Starts program, which helps pay for certain rail, bus, and trolley

projects through full funding grant agreements. In the last 6 years, this

program has provided state and local transit agencies with about $4.7

billion to help design and construct such projects throughout the country.

The Transportation Equity Act for the 21st Century (TEA-21)1

, enacted in

1998, authorizes $6 billion in “guaranteed” funding for New Starts projects

through fiscal year 2003. While the level of New Starts funding is higher

than it has ever been, the demand for these resources is also extremely

high. Over 190 projects nationwide are authorized to compete for funding.

To prioritize projects for funding, FTA was directed to evaluate, rate, and

recommend potential projects on the basis of specific financial and project

justification criteria. Furthermore, FTA was required to issue regulations

for the evaluation and rating process.

1

P.L.105-178.
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Page 4 GAO/RCED-00-149 Mass Transit

In addition, TEA-21 requires GAO to report by April 30 of 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. In April 1999,2 we issued our first report on

FTA’s efforts to develop an evaluation process and implement TEA-21’s

requirements. This report discusses (1) the refinements made to FTA’s

evaluation and rating process since last year, (2) the means by which New

Starts projects were selected for FTA’s fiscal year 2001 New Starts report

and budget request, and (3) the impact of FTA’s recommendations on the

agency’s New Starts commitment authority. This report also discusses our

recommendation that the Department of Transportation (DOT) further

prioritize the projects it rates as “highly recommended” or “recommended”

and ready for funding. We made the recommendation on March 8, 2000, in

testimony before the Subcommittee on Transportation, House Committee

on Appropriations.3

Results in Brief While FTA’s fiscal year 2001 New Starts project evaluation and rating

process was very similar to last year’s, the agency made a number of

refinements to the process. For instance, for fiscal year 2001, potential

grantees were more strictly assessed on their ability to build and operate a

proposed project than in the past. Such assessments are meant to ensure

that no outstanding issues concerning a project’s scope, or cost, or a

locality’s financial commitment could jeopardize the project once a grant

agreement is signed. While FTA has developed an evaluation process that

addresses TEA-21’s requirements, final regulations need to be issued to

formalize the process. FTA issued a proposed rule on April 7, 1999, and

plans to issue final regulations by the summer of 2000.

In selecting projects for its fiscal year 2001 New Starts funding proposal,

FTA gave first preference to the projects with existing grant agreements.

Following that, FTA selected from the projects that it had rated as “highly

recommended” or “recommended” and determined to be ready for grant

agreements by the end of fiscal year 2001. Of the 48 projects evaluated, 32

were rated as “highly recommended” or “recommended” and 15 were

2

Mass Transit: FTA’s Progress in Developing and Implementing a New Starts Evaluation

Process (GAO/RCED-99-114, Apr. 26, 1999).

3

Mass Transit: Challenges in Evaluating, Overseeing, and Funding Major Transit Projects

(GAO/T-RCED-00-104, Mar. 8, 2000).
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recommended for grant agreements. The remaining 17 projects were not

recommended for grant agreements for several reasons. According to FTA,

14 of the 17 projects were generally not ready for grant agreements. In

addition, three other projects received “highly recommended” ratings but

were not selected because FTA did not want to fund more than one or two

projects in any given geographic area. For instance, only two of five

proposed projects were selected in the Chicago area and one of three

proposed projects in San Diego.

More state and local transit agencies than ever are competing for New

Starts funds. However, the 14 ongoing projects and the 15 additional

projects proposed in the fiscal year 2001 New Starts report and budget

request would consume more than the total New Starts commitment

authority provided by TEA-21. If all of these new grant agreements were

executed as proposed, FTA would not be able to commit funds to any more

New Starts projects during the last 2 years of TEA-21—through fiscal year

2003. Because there are plans for many more projects to compete for

federal funds in the next several years, we recommended in our March 8,

2000, testimony before the Subcommittee on Transportation, House

Committee on Appropriations, that the Department of Transportation

further prioritize that the projects it rates as “highly recommended” or

“recommended” and determines are ready for New Starts funds.

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

2003 for a variety of transit programs, including financial assistance to

states and localities to develop, operate, and maintain transit systems. One

of these programs, the New Starts program, provides funds to local transit

providers for constructing or extending certain types of mass transit

systems. A full funding grant agreement establishes the terms and

conditions for federal participation, including the maximum amount of

federal funds4

—no more than 80 percent of the estimated net cost of the

project.

To obtain New Starts funds, a project must first progress through a local or

regional review of alternatives, develop preliminary engineering plans, and

meet FTA’s approval for the final design. TEA-21 requires that FTA evaluate

4

Other federal funds available through the Department of Transportation’s highway and

transit formula and federal loan programs can be used to develop, plan, and/or construct

these projects.
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projects against “project justification” and “local financial commitment”

criteria contained in the act. FTA assesses the technical merits of a

proposed project by reviewing the project’s mobility improvements,

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

assessing the stability of a project’s local financial commitment, FTA

assesses the project’s finance plan for evidence of stable and dependable

financing sources to construct, maintain, and operate the proposed system

or extension. In evaluating this commitment, FTA is required to determine

whether (1) the proposed project’s finance plan provides for reasonable

contingency amounts in order to cover unanticipated cost increases; (2)

each proposed local source of capital and operating funds is stable,

reliable, and available within the timetable for the proposed project; and

(3) local resources are available to operate the overall proposed mass

transportation system without requiring a reduction in existing

transportation services.

While these evaluation requirements existed before TEA-21’s enactment,

TEA-21 requires FTA to develop a rating for each criterion as well as an

overall rating of “highly recommended,” “recommended,” or “not

recommended” for each project and use these evaluations and ratings in

approving a project’s advancement to the preliminary engineering and final

design phases, as well as approving grant agreements. The act further

required FTA to issue regulations by October 7, 1998, on the evaluation and

rating process.

TEA-21 also directs FTA to use these evaluations and ratings in deciding

which projects will be recommended to the Congress for funding in a New

Starts report due each February. These funding recommendations are also

reflected in the Department’s annual budget proposal. In addition, TEA-21

requires FTA to issue a supplemental report to the Congress each August

that updates information on projects that have advanced to the preliminary

engineering or final design phases since the annual report.

Status and

Refinements Made to

FTA’s New Starts

Evaluation and Rating

Process

In April 1999, we reported that FTA had made substantial progress in

developing and implementing an evaluation process that included the

individual criterion ratings and overall project ratings required by TEA-21.

Before TEA-21 was enacted, FTA had already taken steps to revise its New

Starts evaluation process because most of the evaluation requirements

contained in TEA-21 were introduced by the Intermodal Surface

Transportation Efficiency Act of 1991 (ISTEA). The results of these

evaluations are used to approve projects for the preliminary engineering
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and final design phase, to execute grant agreements, and to make annual

funding recommendations to the Congress. In March 2000, FTA issued its

fiscal year 2001 New Starts report, which included project evaluations and

ratings based upon the revised process.

New Starts Evaluation and

Rating Process

FTA’s current New Starts evaluation process assigns candidate projects

individual ratings for each TEA-21 criterion in order to assess each

project’s justification and local financial commitment. The process also

assigns an overall rating for each project—which is intended to reflect the

project’s overall merit. FTA considers these overall ratings in deciding

which projects will proceed to the preliminary engineering and final design

phase, be recommended for funding, and receive full funding grant

agreements (see fig. 1 for an illustration of the process).
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Figure 1: The FTA New Starts Evaluation and Rating Process

a The local share is the percentage of a project’s capital cost to be funded from sources other than

federal funds.

b According to FTA, this optional criterion gives grantees the opportunity to provide additional

information about a project that may contribute in determining the project’s overall success.

Source: FTA.

FTA’s evaluation process provides for individual ratings for the four project

justification criteria identified by TEA-21 (mobility improvements,

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

well as for transit-supportive land-use policies (see fig. 1). Similarly, to

evaluate a project’s local financial commitment, FTA rates the project on its

capital and operating finance plans and the local share of its costs.

According to FTA, the agency also considers a variety of “other factors”

when evaluating the project’s justification, including the degree to which

policies and programs are in place as assumed in the forecasts, the

project’s management capability, and additional factors relevant to local

and national priorities.

Stage 3 Overall project

rating

Land-use

rating

Costeffectiveness

rating

Operating

efficiencies

rating

Environmental

benefits

rating

Mobility

improvements

rating

Operating

finance plan

rating

Capital

finance plan

rating

Local

share

ratinga

Stage 2

summary 

ratings

Stage 1

individual

criterion

ratings

Local

financial 

commitment

rating

Other

factorsb

Project

justification

rating
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On the basis of an analysis of the documentation submitted by the project’s

sponsors, FTA assigns a descriptive rating (high, medium-high, medium,

medium-low, or low) for each of the five project justification criteria. The

same is done for the 3 factors used to evaluate the local financial

commitment. (App. I summarizes the measures that FTA uses in applying

the criteria to develop these ratings.) As figure 1 shows, once the individual

criterion ratings are completed, FTA assigns summary project justification

and local financial commitment ratings by combining the individual

criterion ratings. In developing the summary project justification rating,

FTA gives the most weight to the criteria for transit-supportive land use,

cost-effectiveness, and mobility improvements. For the summary local

financial commitment rating, the measures for the proposed local share of

capital costs and the strength of the capital and operating financing plans

are given the most consideration. FTA combines these summary ratings to

assign an overall rating for the project of “highly recommended,”

“recommended,” or “not recommended.” To receive the “highly

recommended” rating, a project must have summary ratings of at least

medium-high for the project justification and local financial commitment.

To receive a rating of “recommended,” the project must have summary

ratings of at least medium. A project is rated as “not recommended” when

either summary rating is lower than medium.

For its fiscal year 2001 New Starts report, FTA rated 9 projects as “highly

recommended,” 23 projects as “recommended,” and 9 projects as “not

recommended.” Of the 9 projects rated as “not recommended,” each had a

financial commitment rating of lower than medium. In assigning overall

project ratings, however, FTA emphasized the continuous nature of project

evaluation. Throughout the report, FTA underscored the fact that as

candidate projects proceed through the project development process—

from the planning through the final design stages—information concerning

costs, benefits, and impacts will be refined. Consequently, FTA updates its

ratings and recommendations at least annually to reflect this new

information, changing conditions, and refined financing plans. Thus, a

project that is rated as “not recommended” in the fiscal year 2001 report

could receive a higher rating in the fiscal year 2002 report to reflect

changes in the project.

Refinements to the Fiscal

Year 2000 Evaluation

Process

While the criteria and measures in the New Starts evaluation and rating

process have not changed since last year, FTA has made a number of

refinements to the process. For instance, in determining which projects are

ready for grant agreements and recommended for funding in the New
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Starts report and the Department’s fiscal year 2001 budget proposal, FTA

took additional steps to ensure that there were no outstanding issues

associated with a project’s scope, cost, or local financial commitment. FTA

also assessed the strength of a project’s proposed capital finance plan by

evaluating the firmness of its funding commitments and programming of

funds. FTA also evaluated the ability of the sponsoring agency to finance

the construction as well as the maintenance and operation of the entire

system as planned, including existing service, once the project is built.

Finally, FTA considered the following issues in evaluating grantees for this

year’s budget proposal:

• the degree to which the transit agency has a satisfactory plan to manage

an existing bus fleet to ensure no degradation of service for users of the

current system;

• compliance with the Americans with Disabilities Act of 1990, including

financial commitments necessary to maintain accessible service, make

necessary improvements, and comply with key requirements for

stations; and

• compliance with air quality standards in the region.

FTA Still Needs to Issue

Regulations to Satisfy TEA21’s Requirements

While FTA has implemented a New Starts evaluation process that

addresses TEA-21’s requirements, it still needs to issue final regulations to

formalize the process. FTA did not meet TEA-21’s deadline of October 7,

1998, for issuing these regulations. According to FTA, priority was given to

satisfying the rating requirements and issuing the New Starts reports. FTA

issued a notice of proposed rulemaking on April 7, 1999, and the process

described mirrors the process it used to prepare the fiscal year 2000 and

2001 reports.

Comments on the proposed rule were accepted through July 19, 1999. A

total of 41 individuals and organizations provided comments. While

comments were submitted on virtually every aspect of the proposed rule,

most centered on four key issues: (1) the measure of cost-effectiveness, (2)

the overall project rating, (3) the measure for mobility improvements, and

(4) the continued use of no-build and system alternative proposals5 for

5

For each of the project justification criteria, the proposed project is evaluated against both

a no-build and a Transportation System Management (TSM) alternative—a package of lowto moderate-cost improvements designed to make more efficient use of an existing

transportation system.
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evaluation purposes. For example, 23 comments were received on FTA’s

use of the historical “cost per new rider” measure to indicate the costeffectiveness of a proposed project. The consensus of the commenters was

that the focus on new riders ignores benefits provided to other riders,

which may bias the measure against cities with “mature” transit systems,

where the focus of a proposed project may be to improve service, not

attract new riders. Comments on the overall project rating focused on the

use of this rating and on the possibility that a rating of “not recommended”

would be misinterpreted to mean that a proposed project had no merit,

resulting in the erosion of local support and funding.

The proposed rule retained the existing measure for evaluating the mobility

improvements of a proposed project. The current measure is based on (1)

projected savings in travel time and (2) the number of low-income

households within a half-mile of the proposed stations. Fifteen comments

specifically addressed the measure’s focus on low-income households. Ten

recommended that the measure address the destinations to be served by

the proposed project as well as the households, arguing 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.

FTA is in the process of evaluating these and other comments to the

proposed rule and hopes to issue the final regulations by the summer of

2000. FTA stated that any changes resulting from comments on the

proposed rule will be incorporated into the evaluation and rating process

for the fiscal year 2002 annual report.

DOT Proposes 15 New

Projects for New Starts

Funding

The Department’s New Starts report and budget for fiscal year 2001

proposes that $1.1 billion be made available for the construction of new

transit systems and expansions of existing systems—funded through the

New Starts program. Of this amount, a total of $639.3 million would be

allocated among the 14 projects with existing grant agreements. An

additional $316 million would be allocated among 15 projects proposed for

grant agreements.6 As authorized under TEA-21, the remaining $84.7

6

According to FTA, one of the 15 projects—Northern New Jersey/Hudson Bergen light

rail—is ready for a federal grant agreement but does not require New Starts funding until

fiscal year 2004; however, executing a grant agreement in fiscal year 2001 would provide the

transit agency with authority to borrow funds to begin construction.
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million (or 8 percent) would be made available for preliminary engineering

activities, with specific recommendations for 10 projects.

In making its funding proposal each year, FTA gives first preference to

projects with existing grant agreements. Following that, consideration is

given to projects with an overall rating of “recommended” or higher.

However, some projects rated as “highly recommended” or

“recommended” may not meet FTA’s “readiness test” for funding because

they are in the early stages of preliminary engineering. FTA uses a number

of milestones to determine whether a project is sufficiently developed to be

considered for a grant agreement. For example, FTA determines whether

the necessary real estate has been acquired, utility arrangements have been

made, and local funding sources are in place. According to an FTA official,

this ensures that there are no “red flags” signaling that the project has

outstanding issues it must address.

For fiscal year 2001, FTA evaluated 48 projects, rated 32 as “highly

recommended” or “recommended,” and proposed executing new grant

agreements for 15 projects that are expected to be ready for grant

agreements by the end of fiscal year 2001.7 As table 1 shows, 6 of the 15

proposed projects were rated overall as “highly recommended” on the basis

of their strong cost-effectiveness and transit supportive land-use policies

and a demonstrated local financial commitment to build and operate the

projects. For instance, the proposed Portland Interstate Metropolitan Area

Express (MAX) project received the highest summary ratings for both the

financial and project justification measures. The project received a high

rating in transit-supportive land use8 because of the number of major

facilities and centers (e.g. Portland State University, the Civic Stadium, and

Memorial Coliseum) that will encourage high ridership, the expected

growth in employment and population through 2020, and current zoning

regulations that support high residential and commercial densities. In

addition, the high ratings for the proposed project’s capital and operating

financing plans reflect the solid financial condition of the transit agency

and the other funding partners, as well as the stability of operating funds,

sufficient projected revenue growth, and adequate cash reserves.

7

Seven projects were not rated because an exemption is granted to projects when the

anticipated New Starts share of the total estimated capital cost is below $25 million.

8

In evaluating a proposed project against the transit-supportive land-use criterion, FTA

considers such factors as employment and population density, existing station area

development, existing zoning regulations, and containment of sprawl.
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Table 1: Projects Recommended for Funding in Fiscal Year 2001

Financial rating criteria

Phase and city (project)

Overall

project

rating Financial rating

Capital finance

rating Operating finance rating

Final design

Newark (Newark Elizabeth Rail Link,

MOS-1)

Highly

recommended

Medium-high Medium-high Medium-high

San Diego (Mission ValleyEast LRT

Extension)

Highly

recommended

Medium-high High Medium-high

Ft. Lauderdale (Tri-Rail Double Track

Corridor)

Recommended Medium Medium Medium

Northern New Jersey (HudsonBergen LRT MOS-2)Recommended Medium Medium Medium

Pittsburgh (Stage II LRT Program) Recommended Medium-high Medium-high Medium-high

Preliminary Engineering

Portland (Interstate MAX Project) Highly

recommended

High High High

Chicago (Douglas Branch

Reconstruction)

Highly

recommended

Medium-high Medium-high Medium

Chicago (Metra South West

Corridor)

Highly

recommended

Medium-high Medium-high High

Seattle (Link Light Rail MOS) Highly

recommended

Medium-high High Medium

Baltimore (Central Light Rail Double

Track)

Recommended Medium-high High Medium-high

Denver (Southeast Corridor Light

Rail)

Recommended Medium-high Medium-high Medium-high

Memphis (Medical Center Rail

Extension)

Recommended Medium Medium-high Medium

Minneapolis (Hiawatha Avenue

Corridor LRT)

Recommended Medium-high Medium-high Medium

Salt Lake City (University Light Rail

Line)

Recommended Medium Medium-high Medium

Washington DC (Largo Town Center

Metrorail)

Recommended Medium Medium Medium
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Legend

LRT = light rail transit

MOS = minimum operable segment

Source: FTA’s FY 2001 New Starts Report.

Project justification criteria

Project justification

rating

Mobility improvement

rating

Environment benefits

rating

Operating efficiency

rating

Costeffectiveness

rating

Land use

rating

Medium-high Low-medium Medium Medium Medium-high Mediumhigh

Medium-high Medium High Medium Medium Mediumhigh

Medium Medium-high Low Low Low-medium Medium

Medium Medium Medium Medium Low Mediumhigh

Medium Low-medium High High Medium-high Medium

High High High Medium Medium-high High

Medium-high Medium High Medium Medium High

Medium-high High Medium Medium Medium-high Medium

High Medium High Medium High High

Medium Medium High Medium Medium-high Lowmedium

Medium Medium Medium Medium Low-medium Medium

Medium Not rated Medium Medium High Medium

Medium Low-medium High Medium Low-medium Mediumhigh

Medium Low-medium Medium Medium Medium-high Medium

Medium Medium High Medium Medium Mediumhigh
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The other nine projects proposed for grant agreements received overall

ratings of “recommended,” most were rated medium or medium-high on

the project justification and/or local financial commitment criteria. For

instance, the Ft. Lauderdale Tri-County commuter rail project’s rating was

based on the project’s strong mobility improvements and the existence of

moderate population and residential densities along the corridor, as well as

the adequacy of the project’s financial plan. The proposed system would

serve over 10,000 new riders daily by 2015, and the transit agency estimated

that over 11 million hours of travel time would be saved annually for local

commuters. In contrast, the sponsor of a project that was not

recommended for funding in 2001 estimated that only 0.4 million hours

would be saved annually by travelers.

Seventeen projects received “highly recommended” or “recommended”

ratings but were not proposed for grant agreements. Three of these

projects—Chicago Ravenswood subway line; San Diego Mid Coast

Corridor light rail line; and San Diego Oceanside-Escondido rail line—

received “highly recommended” ratings. FTA officials told us that these

projects met FTA’s evaluation and rating criteria as well as FTA’s “readiness

test” but were not selected because FTA did not want to fund more than

one or two projects in any metropolitan area. For instance, only two of the

five proposed projects were selected for the Chicago area and one of the

three proposed projects in San Diego. The other 14 projects were rated

overall as “recommended.” Many of these projects were not proposed for

grant agreements in fiscal year 2001 because they are in the very early

stages of development.

Finally, FTA rated nine proposed projects as “not recommended” primarily

because of low local financial commitment summary ratings, reflecting

their lack of updated financial plans and/or lack of committed local funding

to build and operate the systems. For instance, one of the nine proposed

projects received low ratings for the stability and reliability of its capital

and operating financing plans, reflecting FTA’s concerns about the transit

agency’s financial condition and lack of demonstrated financial capacity to

undertake the proposed project. Other reasons for receiving a low financial

rating included not submitting a financial plan or other financial

information for the project or entire transit system, having a large share of

uncommitted or unidentified local funding, and lacking financial resources

to operate the proposed system.
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Many Transit Projects

Are Competing for

Limited Federal Transit

Dollars

More state and local transit agencies than ever are competing for New

Starts funds. However, the 14 ongoing projects and the 15 new projects

proposed in the New Starts report and 2001 budget request would consume

more than the total New Starts commitment authority provided by TEA-21,9

if all of these new grant agreements were executed as proposed. If this

were to occur, FTA would not be able to commit funds to any more projects

during the last 2 years of TEA-21—through fiscal years 2002 and 2003—

even though many additional projects may soon be eligible for funding.

According to FTA, it has already committed $4.1 billion of its total available

authority of $8.4 billion to the 14 ongoing projects. After accounting for

other requirements (such as the cost of providing project management

oversight for the program), which are expected to total about $1.2 billion

through 2003, about $3.1 billion remains for future grant agreements. The

Department’s fiscal year 2001 budget proposes $316 million for the 15 new

projects. However, the $316 million requested for these new projects for

2001 will be only a down payment on what would amount to a total federal

commitment of $3.9 billion if no changes were made to the current grant

proposals. This $3.9 billion commitment is $800 million more than FTA’s

remaining commitment authority of $3.1 billion. Figure 2 shows FTA’s

limited commitment authority under TEA-21.

9

TEA-21 authorized $6.0 billion in “guaranteed” funding for New Starts projects and allowed

FTA to make contingent commitments beyond this amount subject to future authorizations

and appropriations. This contingent commitment authority is designed to allow FTA to

execute grant agreements that extend beyond the 6-year period. In implementing TEA-21,

FTA determined that it could make contingent commitments of $2.4 billion from the act’s

enactment through the authorization period.
Page 18 GAO/RCED-00-149 Mass Transit

Figure 2: TEA-21 Commitment Authority for New Starts Projects and DOT’s Fiscal

Year 2001 New Starts Budget Request

Source: AGO’s analysis of FTA’s data.

FTA officials told us that the agency decided to propose exhausting the

remaining authority in its fiscal year 2001 budget request—rather than

withholding some authority for new projects in the remaining years of TEA21—because New Starts funds have traditionally been provided to all

eligible projects on a first-come, first-served basis. Furthermore, according

to these officials, executing grant agreements for the 15 new projects

allows them to move forward to begin construction.

In addition to the 29 ongoing and proposed projects, TEA-21 identified

more than 160 other projects as eligible for New Starts funds. According to

FTA, as many as 40 of these projects could be ready to receive a grant

agreement and begin construction in the next several years. Because of this

impending transit “budget crunch,” we recommended in our testimony on

March 8, 2000, before the Subcommittee on Transportation, House

Committee on Appropriations, that DOT further prioritize the projects it

rates as “highly recommended” or “recommended” and ready to receive

New Starts funds.10 FTA officials, including FTA’s Director, Office of Policy

10Mass Transit: Challenges in Evaluating, Overseeing, and Funding Major Transit Projects

(GAO/T-RCED-00-104, Mar. 8, 2000).

Federal commitment 

for 14 ongoing projects

$0.8

$3.1

FTA oversight and 

other obligations Budget request

above available

commitment 

authority

Federal commitment 

authority remaining 

for new projects

$1.2

$3.1

$4.1

(Dollars in billions) $3.9
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Page 19 GAO/RCED-00-149 Mass Transit

Development, agree with our recommendation and told us that they would

consider various ways to further prioritize eligible projects.

Agency Comments We provided the Department of Transportation with a draft of this report

for review and comment. We discussed the report with Federal Transit

Administration officials, including the Director for Policy Development and

an official from the Office of Planning. FTA agreed with the report’s

contents and provided us with one technical clarification, which we

incorporated.

Scope and

Methodology

To address the issues discussed in this report, we reviewed the legislation

governing New Starts transit projects, FTA’s annual New Starts reports for

fiscal year 2000 and 2001, and other documentation by the agency of its

processes and procedures for evaluating projects. We also interviewed

appropriate FTA headquarters officials. We performed our work in

accordance with generally accepted government auditing standards from

March through April 2000.

We are sending copies of this report to the Honorable Rodney E. Slater,

Secretary of Transportation; the Honorable Nuria Fernandez, Acting

Administrator, Federal Transit Administration; the Honorable Jacob Lew,

Director, Office of Management and Budget; and other interested parties.

We will also make copies available to others upon request. Key

contributors to this report were Jack Bagnulo, Susan Fleming, and Ron

Stouffer. Please call me at (202) 512-3650 if you have any questions about

this report.

Phyllis F. Scheinberg

Associate Director,

Transportation Issues
Page 20 GAO/RCED-00-149 Mass Transit

Appendix I

New Starts Criteria and Related Performance Apendxies

Measures ApendxiI

Table 2 presents a summary of each of the New Starts criteria and the

related performance measures that the Federal Transit Administration uses

to appraise candidate New Starts projects as part of its evaluation and

rating process.

Table 2: Summary of New Starts Evaluation Criteria and Performance Measures

Source: FTA

Criterion Performance measure

Mobility improvements Change in hours of travel time

Low-income households served by the system, expressed in terms

of the number of such households within a half-mile of a project's

boarding points

Environmental benefits Change in pollutant emissions

Change in regional energy consumption, expressed in British

thermal units

The Environmental Protection Agency's air quality designation for

the region

Operating efficiencies Operating cost per passenger mile

Cost-effectiveness Incremental cost per incremental passenger

Transit-supportive land use Existing land use

Containment of sprawl

Transit-supportive corridor policies

Supportive zoning regulations

Tools to implement land-use policies

Performance of land-use policies

Other land-use factors

Other factors Local policies, programs, and factors relevant to the success of the

project

Local financial commitment Proposed local share of project costs

Stability and reliability of capital financing

Stability and reliability of operating funds
Page 21 GAO/RCED-00-149 Mass Transit

Appendix II

FTA’s Fiscal Year 2001 New Starts Ratings and

Funding Recommendations ApendxiI

Dollars in millions

City/project Overall project rating

FY 2001 recommended

funding

Existing full funding grant agreementsa

Atlanta - North Springs FFGA $25.00

Boston - South Boston Piers Transitway Phase 1 FFGA 35.97

Dallas - North Central LRT Extension FFGA 70.00

Denver - Southwest Corridor LRT FFGA 20.20

Houston - Regional Bus Plan FFGA 10.74

Los Angeles - North Hollywood FFGA 50.00

Northern New Jersey - Hudson-Bergen LRT MOS-1 FFGA 121.00

Portland - Westside/Hillsboro LRT FFGA 0.21

Sacramento - South LRT Extension FFGA 35.20

Salt Lake City - North-South LRT FFGA 0.72

San Francisco - BART Extension to Airport FFGA 80.00

San Jose - Tasman West LRT FFGA 12.25

San Juan - Tren Urbano FFGA 118.00

St. Louis - Metrolink St. Clair Extension FFGA 60.00

Subtotal $639.29

Proposed full funding grant agreements

Ft. Lauderdale - Tri-Rail Commuter Rail Upgrade Recommended $30.00

Newark Rail Link (MOS 1) Highly recommended 10.00

San Diego - Mission Valley East LRT Extension Highly recommended 65.00

Baltimore - Central LRT Double-Tracking Recommended 10.00

Chicago - Douglas Branch Reconstruction Highly recommended 17.00

Chicago - Metra South West Corridor Commuter Rail Highly recommended 10.00

Denver - Southeast Corridor LRT Recommended 20.00

Memphis - Medical Center Extension Recommended 14.17

Minneapolis − Hiawatha Corridor LRT Recommended 20.00

Northern New Jersey − Hudson-Bergen MOS-2 Recommended 0.00

Pittsburgh - Stage II LRT Reconstruction Recommended 20.00

Portland - Interstate MAX LRT Extension Highly recommended 40.00

Salt Lake City - CBD to University LRT Recommended 15.00

Seattle - Central Link LRT Highly recommended 35.00

Washington DC/MD − Largo Extension Recommended 10.00

Subtotal $316.17

Continued
Appendix II

FTA’s Fiscal Year 2001 New Starts Ratings and

Funding Recommendations

Page 22 GAO/RCED-00-149 Mass Transit

City/project Overall project rating

FY 2001 recommended

funding

Other projects in final design

Dallas- Ft. Worth − Trinity Railway Express Recommended $0.00

Los Angeles − San Diego Rail Corridor Improvement Project Not ratedb 0.00

New Orleans - Canal Streetcar Spine Not recommended 0.00

San Juan - Minillas Extension Recommended 0.00

Subtotal $0.00

Preliminary engineering recommendations

Chicago - Metra Commuter Rail (North Central/UP West) Recommended $10.00

Chicago - Ravenswood Line Expansion Highly recommended 8.80

Cleveland - Euclid Corridor Improvement Project Recommended 8.80

Little Rock - River Rail Project Not ratedb 5.67

Maryland - MARC Commuter Rail Improvements Not ratedb 10.00

Miami - South Miami-Dade Busway Extension Recommended 8.80

Nashville - East Corridor Commuter Rail Not ratedb 8.80

New York − Long Island Rail Road East Side Access Recommended 10.00

New York - 2nd Avenue Subway Not ratedb 5.00

San Diego County - Oceanside-Escondido Rail Project Highly recommended 8.80

Subtotal $84.67

Other projects in preliminary design

Austin - Northwest/North Central Corridor Recommended

Boston - South Boston Piers Transitway Phase 2 Not recommended

Cincinnati - I-71 Corridor Not recommended

Kansas City - Johnson County I-35 Commuter Rail Not ratedb

Hartford - New Britain-Hartford Busway Recommended

Houston - Downtown to Astrodome Light Rail Recommended

Las Vegas - Resort Corridor Fixed Guideway MOS Recommended

Miami - East/West Corridor Not recommended

Miami - North 27th Avenue Corridor Not recommended

Norfolk - Norfolk-Virginia Beach LRT Corridor Not recommended

Orange County - Centerline Rail Corridor Recommended

Phoenix - East Valley Light Rail Not recommended

Raleigh - Regional Transit Plan Phase I Not recommended

San Diego - Mid Coast Corridor Highly recommended

San Francisco - Third Street Light Rail Phase I Recommended

Seattle - Everett-Seattle Sounder Commuter Rail Not ratedb

Tampa - Tampa Bay Regional Rail Not recommended

Continued from Previous Page
Appendix II

FTA’s Fiscal Year 2001 New Starts Ratings and

Funding Recommendations

Page 23 GAO/RCED-00-149 Mass Transit

Legend

FFGA = full funding grant agreement

LRT = light rail transit

MOS = minimum operable segment

Note: Figures do not always add to totals because of rounding.

a Projects with FFGAs were not rated, since FTA had found the projects to be justified and have

adequate local financial commitments at the time the FFGAs were issued. These projects are being

recommended to receive the fiscal year 2001amount committed by the FFGA.

bSeven projects were not rated based upon the exemption granted to projects where the anticipated

New Starts share of the total estimated capital cost is below $25 million.

Source: FTA’s FY 2001 New Starts Report.

City/project Overall project rating

FY 2001 recommended

funding

Washington DC - Dulles Corridor Rapid Transit Recommended

Total $1,040.13

Ferry Capital Projects in Alaska or Hawaii (Section 5309(m)(5)(A)) 10.32

Oversight activities 7.94

Grand total $1,058.39

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