Report to Congressional Committees

United States General Accounting Office

GAO

August 2001 MASS TRANSIT

FTA Could Relieve

New Starts Program

Funding Constraints

GAO-01-987
Page 1 GAO-01-987 New Starts Program Funding Constraints

August 15, 2001

The Honorable Paul S. Sarbanes

Chairman

The Honorable Phil Gramm

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

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 8 years, this

program has provided state and local agencies with over $6 billion to help

design and construct transit projects throughout the country.

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

 enacted in

1998, authorized $6 billion in “guaranteed” funding for the New Starts

program through fiscal year 2003. Although the level of New Starts funding

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

extremely high. TEA-21 identified over 190 projects nationwide as eligible

to compete for New Starts funding. FTA was directed to prioritize

projects for funding by evaluating, rating, and recommending potential

projects on the basis of specific financial and project justification criteria.

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

and rating process.

In addition, TEA-21 requires GAO to report each year on FTA’s processes

and procedures for evaluating, rating, and recommending New Starts

 1

Public Law 105-178 (June 9, 1998).

United States General Accounting Office

Washington, DC 20548
Page 2 GAO-01-987 New Starts Program Funding Constraints

projects for federal funding and on the implementation of these processes

and procedures.2

 In March 2000, in testimony before the Subcommittee on

Transportation, House Committee on Appropriations, we recommended

that the Department of Transportation (DOT) further prioritize among the

projects it rates as “highly recommended” and “recommended” for funding

purposes.3

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

evaluation and rating process since last year, (2) how New Starts projects

were selected for FTA’s New Starts report and budget request for fiscal

year 2002, and (3) FTA’s remaining New Starts commitment authority.

Although FTA’s New Starts project evaluation and rating process for fiscal

year 2002 was very similar to that of fiscal year 2001, the agency made a

number of refinements to the process. For instance, for fiscal year 2002,

potential grantees were more strictly assessed on their ability to build and

operate proposed projects 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 fullfunding grant agreement is signed. In addition, FTA’s final rule for the New

Starts evaluation process, which will be implemented as FTA considers its

New Starts proposal for fiscal year 2003, made a number of technical

changes. For example, the final rule replaces the “cost per new rider”

measure of cost-effectiveness with a new measure of “transportation

system user benefits,” which emphasizes the potential reduction in the

amount of travel time and out-of-pocket costs that people would incur

taking a trip. The final rule also established performance measures to

evaluate the New Starts program and incorporates a two-step data

collection process. This process will measure how well projects remain on

schedule and on budget once commitments to fund them have been made

and the success of New Starts projects once they are in operation.

 2

TEA-21 requires GAO to report by April 30 of each year; however, this year FTA did not

publish its annual New Starts report, which outlines its evaluation process and the results,

until May 25, 2001. Consequently, we were unable to report on FTA’s New Starts program

by April 30, 2001. See Mass Transit: FTA’s Progress in Developing and Implementing a

New Starts Evaluation Process (GAO/RCED-99-113, Apr. 26, 1999); and Mass Transit:

Implementation of FTA’s New Starts Evaluation Process and FY 2001 Funding Proposals

(GAO/RCED-00-149, Apr. 28, 2000).

3

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

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

Results in Brief
Page 3 GAO-01-987 New Starts Program Funding Constraints

FTA’s evaluation process led it to recommend seven new projects for

funding commitments for fiscal year 2002 in its New Starts report and

budget request. FTA evaluated 40 new projects for fiscal year 2002 and

developed ratings for 26 of them. Twenty-three of these projects were

rated as “highly recommended” or “recommended.” FTA proposed grant

agreements for four of these projects because they met its “readiness”

criteria.4

 The remaining 19 “highly recommended” or “recommended”

projects were not proposed for grant agreements for several reasons.

According to FTA, the majority of these projects did not meet tests for

“readiness” and technical capacity. FTA is recommending three additional

projects for funding commitments—one that was exempt from the rating

process and two that were rated last year—for a total of seven projects.

FTA reports that it will have limited authority to make funding

commitments to new projects in fiscal year 2003, if it makes funding

commitments to the seven projects in fiscal year 2002 as proposed. FTA

was authorized to make funding commitments of almost $10 billion for the

New Starts program for fiscal years 1998 through 2003. According to FTA,

it has already committed about $9 billion of this amount. The funding

commitments proposed in FTA’s fiscal year 2002 New Starts report and

budget request would reduce its remaining commitment authority by over

one-half, leaving FTA with less than $500 million for new grant agreements

in fiscal year 2003. This amount may not be enough to fund all of the

projects that will be ready to begin construction in fiscal year 2003. In an

effort to conserve commitment authority for future projects, FTA’s fiscal

year 2002 proposal did not allocate New Starts funds for preliminary

engineering work as it has routinely done in the past. However, FTA could

significantly increase the commitment authority available for projects

competing for New Starts funds in 2003 by “releasing” amounts reserved

for projects that have been suspended. As of today, two segments of a

New Starts project in Los Angeles have been suspended for over 3 years,

and FTA has informed the project’s sponsors that it no longer has funding

commitments for the suspended segments. However, FTA continues to

reserve $647 million in commitment authority for the project. “Releasing”

this amount for projects competing for New Starts funding would give FTA

additional funding flexibility through fiscal year 2003.

 4

In determining which projects can be expected to be ready for grant agreements and thus

be recommended for funding, FTA applies tests for readiness and technical capacity. To

ensure that the projects are fully developed, FTA ensures that no outstanding project scope

or cost issues remain and that there are no outstanding local financial commitment issues.
Page 4 GAO-01-987 New Starts Program Funding Constraints

Our report contains a recommendation to the Secretary of Transportation

to make commitment authority allocated to projects for which the federal

funding commitments have been withdrawn available for all projects

competing for New Starts funding. We provided DOT with a draft of this

report for review and comment. FTA did not provide any comments or

technical clarifications on the draft. In addition, FTA indicated that further

consideration will be necessary before a decision is made on the report’s

recommendation.

TEA-21 authorized a total of $36 billion in “guaranteed” funding5

 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 transit

providers for constructing or extending certain types of mass transit

systems.6

 A full-funding grant agreement (FFGA) establishes the terms and

conditions for federal participation, including the maximum amount of

federal funds available for the project, which cannot exceed 80 percent of

its estimated net cost. The grant agreement also defines 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 a grant agreement, a project must first progress through a

local or regional review of alternatives, develop preliminary engineering

plans, and obtain FTA’s approval for final design.7

TEA-21 requires that FTA evaluate projects against “project justification”

and “local financial commitment” criteria contained in the act. FTA

assesses the project justification or technical merits of a project proposal

by reviewing the project’s mobility improvements, environmental benefits,

 5

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

minimum amounts of funding are available each year.

6

Other federal funds available through DOT highway and transit programs can also be used

to develop, plan, and/or construct these projects.

7

The alternatives analysis stage provides information on the benefits, costs, and impacts of

alternative strategies leading to the selection of a locally preferred solution to the

community’s mobility needs. During 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. Final 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.

Background
Page 5 GAO-01-987 New Starts Program Funding Constraints

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 incorporates reasonable contingency amounts 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.

Although these evaluation requirements existed prior to the enactment of

the act, TEA-21 requires FTA to (1) develop a rating for each criterion as

well as an overall rating of “highly recommended,” “recommended,” or

“not recommended” and use these evaluations and ratings in approving

projects’ advancement to the preliminary engineering and final design

phases and approving grant agreements; and (2) issue regulations on the

evaluation and rating process. TEA-21 also directs FTA to use these

evaluations and ratings to decide which projects to recommend to the

Congress for funding in a 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.

In April 1999 and 2000, 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-21.8

 Before TEA-21 was enacted, FTA had already taken

steps to revise its evaluation process for the New Starts program because

most of the evaluation requirements contained in the act were introduced

by the Intermodal Surface Transportation Efficiency Act of 1991 (ISTEA).

FTA uses the results to approve projects for the preliminary engineering

and final design phases, to execute grant agreements, and to make annual

 8

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

Evaluation Process (GAO/RCED-99-113, Apr. 26, 1999); and Mass Transit:

Implementation of FTA’s New Starts Evaluation Process and FY 2001 Funding Proposals

(GAO/RCED-00-149, Apr. 28, 2000).

FTA’s Evaluation and

Rating Process for

New Starts Proposals

Finalized
Page 6 GAO-01-987 New Starts Program Funding Constraints

funding recommendations to the Congress. In May 2001, FTA issued its

New Starts report for fiscal year 2002, which included project evaluations

and ratings based upon the revised process. FTA’s final rule, issued in

December 2000, formalized the evaluation and rating process.9

 Next year’s

process will use the procedures set forth in the final rule.

FTA’s current New Starts evaluation process assigns 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 that is intended to reflect the project’s overall merit. FTA

considers these overall ratings to decide which projects will proceed to

the preliminary engineering and final design phases, be recommended for

funding, and receive full-funding grant agreements (see fig. 1 for an

illustration of the process).

 9

The rule became effective in April 2001.

New Starts Evaluation and

Rating Process
Page 7 GAO-01-987 New Starts Program Funding Constraints

Figure 1: FTA’s 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.

A project’s overall rating is a combination of the project justification and

local financial commitment ratings. With respect to project justification,

FTA provides individual ratings for the four criteria identified by TEA-21—

mobility improvements, environmental benefits, operating efficiencies,

and cost-effectiveness—as well as for transit-supportive land-use policies.

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. 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.
Page 8 GAO-01-987 New Starts Program Funding Constraints

After analyzing the documentation submitted by the project’s sponsors,

FTA assigns a descriptive rating (high, medium-high, medium, mediumlow, or low) for each of the project justification and local financial

commitment criteria. (App. I summarizes the performance 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 ratings, the

measures for the proposed local share of capital costs and the strength of

the capital and operating finance plans are given equal consideration. FTA

combines the summary project justification and local financial

commitment ratings to create an overall rating for the project of “highly

recommended,” “recommended,” or “not recommended.” To receive a

“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.

In preparing its New Starts 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; FTA

uses a number of milestones to determine whether a project is sufficiently

developed 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. In addition, FTA has considered

the following issues in evaluating grantees:

• 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.
Page 9 GAO-01-987 New Starts Program Funding Constraints

For its New Starts report for fiscal year 2002, FTA evaluated a total of 40

projects and provided overall ratings for 26 of these projects.10 Of the 26

projects that were rated, 21 were rated as “recommended,” 2 projects were

rated as “highly recommended,” and 3 projects received “not

recommended” ratings. According to FTA, fewer projects received “highly

recommended” ratings this year because FTA set the bar higher for such

ratings.11 FTA believes that fewer projects received “not recommended”

ratings because project officials have a better understanding of the

evaluation and rating process and criteria used to assess a project’s

justification and local financial commitment.

In assigning overall project ratings, FTA emphasized the continuous

nature of project evaluation. Throughout the report, FTA underscored the

fact that as candidate projects proceed through the final design stage,

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 2002 report could receive a rating of “recommended” or “highly

recommended” in the fiscal year 2003 report to reflect changes in the

project. For example, in the report for fiscal year 2001, the New Orleans

Canal Streetcar project received a “not recommended” rating. However,

this year the project received a “recommended” rating and was proposed

for a grant agreement. FTA attributed the project’s improved rating to an

improved finance plan—specifically, firmer financial commitments.

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

process have not changed, FTA’s final rule, issued in December 2000,

made a number of refinements to the process. The final rule will be used

as FTA considers its New Starts proposal for fiscal year 2003. The

refinements in the final rule reflect public comments on FTA’s proposed

rule, which was issued in April 1999. Comments on the proposed rule were

accepted through July 1999. A total of 41 individuals and organizations

 10Ten projects were not rated because projects with anticipated New Starts funding of less

than $25 million are exempt from the evaluation and rating process. FTA strongly

encourages sponsors who believe their projects to be exempt to nonetheless submit

information for evaluation Four other projects were not rated because they submitted

insufficient information for a complete evaluation.

11Last year, FTA rated 9 projects as “highly recommended,” 23 projects as “recommended,”

and 9 projects as “not recommended.”

Final Rule Refines New

Starts Evaluation Process
Page 10 GAO-01-987 New Starts Program Funding Constraints

provided comments. Comments were submitted on virtually every aspect

of the proposed rule, but most centered on four key issues:

• the measure of cost-effectiveness,

• the continued use of a no-build and Transportation System Management

(TSM) alternative for evaluation purposes,

• the overall project rating, and

• the measure for mobility improvements.

Twenty-three comments were received on FTA’s use of the historical “cost

per new rider” measure to indicate the cost-effectiveness 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. In

response, the final rule replaced the “cost per new rider” measure with a

new measure of “transportation system user benefits.” According to FTA,

this measure is based on the basic goals of any major transportation

investment—to reduce the amount of travel time and out-of-pocket costs

that people incur for taking a trip (i.e., the cost of mobility). This approach

de-emphasizes new riders by measuring not only the benefits to people

who change modes but also benefits to existing riders and highway users.

The need to evaluate a New Starts project against a no-build and TSM

alternative was also the subject of substantial public comment.

Commenters believed that evaluating proposed New Starts projects

against both a no-build and a TSM alternative was unnecessarily

burdensome, noting that certain incremental system improvements will

occur whether the New Starts project is constructed or not—that is, it is

no longer appropriate to view the no-build alternative as a “do nothing”

scenario. In response to comments submitted on this issue and to simplify

the New Starts process, the final rule eliminates the need to evaluate a

proposed project against both a separate no-build and TSM alternatives.

Instead, the final rule requires that the proposed New Starts projects be

evaluated against a single “baseline alternative” agreed upon by project

sponsors and FTA. The baseline alternative involves transit improvements

that are lower in cost than the proposed New Starts project, resulting in a

better ratio of measures of transit mobility compared to the no-build

alternative. The purpose of the baseline comparison is to isolate the costs

and benefits of the proposed major transit investment.

Comments on the overall project rating focused on the possibility that a

rating of “not recommended” would be misinterpreted to mean that a
Page 11 GAO-01-987 New Starts Program Funding Constraints

proposed project had no merit, resulting in the erosion of local support

and funding. In response to these comments, the final rule added oneletter indicators to the “not recommended” rating that explain where

improvement is needed: “j” for project justification, “o” for the operating

funding plan, and “c” for the capital funding plan. Thus, in future New

Starts reports, a proposed project that was found to need improvement in

the capital plan would be rated as “not recommended (c).”

Finally, public comment on the proposed rule recommended that the

measure for mobility improvements be refined. The proposed measure

was based on (1) projected savings in travel time and (2) the number of

low-income households within a half-mile of the proposed stations. The

majority of commenters specifically addressed the measure’s focus on

low-income households. Many recommended that the measure include

the destinations to be served by the proposed project as well as the

number of households near boarding points, 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. The

final rule added a new factor to calculate destinations for jobs within a

half-mile of boarding points on the new system, complementing the

existing factor that measures low-income households within a half-mile of

boarding points.

Although FTA’s intent to develop performance measures to evaluate the

New Starts program for purposes of the Government Performance and

Results Act of 1993 (GPRA) did not generate significant comment, FTA

believes that the need for them still exists. Toward that end, the final rule

requires that future project applications include a two-step data collection

process for determining the degree to which projects remain on schedule

and on budget once commitments to fund them have been made (i.e., grant

agreements have been executed); and for measuring the success of New

Starts projects once they are in operation. For those New Starts projects

with grant agreements, FTA will combine before and after data with

planning projections to evaluate the projects in several areas, including

capital costs, operating costs, and system utilization.
Page 12 GAO-01-987 New Starts Program Funding Constraints

FTA’s New Starts report and budget proposal for fiscal year 2002 requests

that $1.14 billion be made available for the construction of new transit

systems and expansions of existing systems through the New Starts

program. After amounts for FTA oversight activities and for other

purposes specified by TEA-2112 are subtracted, a total of $1.11 billion

would remain available for projects in fiscal year 2002. Of this amount, a

total of $993.5 million would be allocated among 26 projects with existing

grant agreements.13 An additional $121.2 million would be allocated to

seven new projects.14 (See fig. 2.) Unlike prior years, FTA did not request

funding for preliminary engineering activities.15

 12FTA has proposed using 1 percent of amounts made available for the New Starts program

for project management oversight activities, rather than 0.75 percent as currently

authorized. 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 extensions

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

ferry terminal facilities.

13FTA did not request funds for 2 of the 26 projects with existing grant agreements. It did

not request funds for the Hudson-Bergen MOS-2 project in Northern New Jersey because

the grant agreement does not provide for federal contributions before fiscal year 2003. No

funding was requested for the Central Link light rail project in Seattle because the grant

agreement is under review.

14About $37.2 million would be allocated among two projects for which funding

commitments are currently pending, and $84 million would be allocated among five

projects that are expected to be ready for funding commitments before the end of fiscal

year 2002.

15Under TEA-21, no more than 8 percent of the amounts made available each year for New

Starts projects shall be available for activities other than final design and construction. The

House and Senate bills providing appropriations to DOT for fiscal year 2002 would provide

DOT with funding for preliminary engineering activities.

FTA Proposes Seven

New Projects for New

Starts Funding
Page 13 GAO-01-987 New Starts Program Funding Constraints

Figure 2: New Starts Funding Proposal, Fiscal Year 2002

Source: GAO’s analysis of FTA data.

As described earlier, for fiscal year 2002 FTA evaluated 40 projects and

prepared ratings for 26 of them. Of the 26 projects that received ratings,

FTA rated 23 projects as “highly recommended” or “recommended” and

proposed executing grant agreements for 4 projects that are expected to

meet the readiness criteria by the end of fiscal year 2002. In addition, FTA

is proposing three other projects for funding commitments for fiscal year

2002—for a total of seven projects. These three projects were not rated

this year. Specifically, the Miami (South Miami-Dade Busway Extension)

project plans to use less than $25 million in New Starts funds and

therefore is exempt from the evaluation process. The Chicago (Metra

Southwest Corridor Commuter Rail) and Baltimore (Central LRT Double

Tracking) projects were proposed for grant agreements last year and are

considered “pending federal commitments.”16 According to FTA, the

ratings of these two projects from last year are still valid. (Table 1 shows

 16These two projects were rated and proposed in last year’s New Starts report, but grant

agreements were not executed. The Chicago (Metra Southwest Corridor Commuter Rail)

project received an overall rating of “highly recommended”; the Baltimore (Central LRT

Double Tracking) project was rated as “recommended.” FTA is proposing these projects

again for fiscal year 2002.
Page 14 GAO-01-987 New Starts Program Funding Constraints

the ratings for the seven projects recommended for New Starts funding in

fiscal year 2002.)

Table 1: Projects Recommended for New Starts Funding in Fiscal Year 2002

a

The ratings for Chicago (Metra Southwest Corridor Commuter Rail) and Baltimore (Central LRT

Double Tracking) are the ratings they received last year. According to FTA, these ratings are still

valid.

b

The Miami (South Miami-Dade Busway Extension) project expects to use less than $25 million in

New Starts funds. Proposed projects requiring less than $25 million in New Starts funding are

exempt from the project evaluation and rating process.

Source: FTA’s New Starts Reports for fiscal year 2001 and 2002.

As table 1 shows, two of the seven proposed projects received “highly

recommended” ratings on the basis of their strong cost-effectiveness, good

transit-supportive land-use policies, and a demonstrated local financial

commitment to build and operate the projects. For instance, the proposed

San Diego County/Oceanside-Escondido Rail project received a mediumhigh rating in mobility improvements because it is expected to serve

15,100 average weekday boardings in 2015, including 8,600 new daily

riders. According to FTA, it will also help to eliminate the heavy

congestion of northern San Diego County along the Route 78 corridor,

saving 700,000 hours of travel time a year compared to the TSM
Page 15 GAO-01-987 New Starts Program Funding Constraints

alternative. 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 sufficient

projected revenue growth and contingencies.

Five of the seven projects proposed received overall ratings of

“recommended” or were exempt from the rating process.17 Most were

rated medium or medium-high on the project justification and/or local

financial commitment criteria. For instance, the Baltimore/Central LRT

double tracking project’s “recommended” rating was based on the

project’s strong environmental benefits, cost-effectiveness, and

demonstrated local financial commitment. According to FTA’s New Starts

report, the proposed system would significantly reduce nitrogen oxide and

carbon monoxide emissions and would cost $8.70 per incremental

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

for funding in 2002 estimated that the proposed project would annually

increase carbon dioxide emissions by 4,360 tons and would cost $15.50 per

passenger. Finally, the Baltimore project’s strong financial rating reflects

FTA’s favorable assessment of state support of transit operating subsidies

and the financial soundness of the agency’s operations.

Nineteen other New Starts projects received “highly recommended” or

“recommended” ratings but were not proposed for grant agreements. One

of these projects—San Diego Midcoast Corridor—received a “highly

recommended” rating based on the project’s strong cost-effectiveness,

good transit-supportive land use, and strong local financial commitment

ratings. FTA officials told us that this project met FTA’s evaluation and

rating criteria as well as its “readiness test” but was not selected because

completing the San Diego Mission Valley East LRT extension (an ongoing

project) is the transit authority’s top priority. FTA also notes that the

authority may not have the financial capacity to fund both projects at this

time. The other 18 projects were rated overall as “recommended.” Many of

these projects were not proposed for grant agreements in fiscal year 2002

because they are in the early stages of development and will not be ready

for final design or construction for several years.

Finally, FTA rated three proposed projects as “not recommended”

primarily because of low local financial commitment summary ratings,

 17The Miami (South Miami-Dade Busway extension) project was exempt from the rating

process and did not submit information to FTA.
Page 16 GAO-01-987 New Starts Program Funding Constraints

reflecting the uncertainty of their local financial commitment or lack of

committed local funding to build and operate the systems. For instance,

one of the three projects received low ratings for the stability and

reliability of its capital and operating finance plans, reflecting FTA’s

concerns about the lack of progress in the commitment of nonfederal

funds and the absence of a local entity to build and operate the project.

Other reasons for receiving a low financial rating included the absence of

a dedicated funding source for operating the project and the uncertainty of

revenue sources for the project.

According to FTA, it will have limited authority to make funding

commitments to New Starts projects throughout the remainder of the

TEA-21 authorization period—the end of fiscal year 2003—if it makes

funding commitments to seven projects as proposed in fiscal year 2002.

TEA-21 and other legislation provided FTA with almost $10 billion in

commitment authority for the New Starts program from fiscal years 1998

to 2003. However, FTA reports that it has already committed about 90

percent of this amount. The projects proposed in FTA’s New Starts report

and budget request for fiscal year 2002 would reduce its remaining

commitment authority by over one-half, leaving it with about $462 million

for new grant agreements in fiscal year 2003. This may not be enough to

fund the 14 projects that FTA estimates may be ready for grant agreements

during fiscal year 2003.

In an effort to conserve commitment authority for future projects, FTA’s

fiscal year 2002 proposal did not allocate New Starts funds for preliminary

engineering activities—something FTA did routinely in recent years.

However, FTA could significantly increase the commitment authority

available for projects competing for New Starts funds by “releasing”

amounts reserved for projects that have been suspended. As of today, two

segments of a New Starts project in Los Angeles have been suspended for

over 3 years, and FTA has informed project sponsors that it no longer has

funding commitments for the suspended segments. However, FTA

continues to reserve $647 million in commitment authority for the project.

Releasing this amount would give FTA additional funding flexibility

through fiscal year 2003. Furthermore, the Administration’s proposed 50-

percent cap on New Starts funding could limit the amount of New Starts

funding available to individual projects during the next surface

transportation authorization period (after fiscal year 2003).

Limited New Starts

Funding Available for

Future Transit

Projects
Page 17 GAO-01-987 New Starts Program Funding Constraints

FTA was authorized to make a record level of funding commitments—

about $10 billion—for the New Starts program from 1998 through 2003.

TEA-21 provided the majority of FTA’s commitment authority, authorizing

$6.09 billion in “guaranteed” funding for the New Starts program. In

addition, TEA-21 and the Department of Transportation appropriations act

for fiscal year 2001 authorized FTA to make an additional $3.4 billion in

contingent commitments, subject to future authorizations and

appropriations.18 According to FTA, it has already committed

approximately $8.9 billion for New Starts projects and program activities.

Specifically, about $7.5 billion is committed to the 26 projects with grant

agreements. After accounting for other requirements (such as the cost of

project management oversight and preliminary engineering), which are

expected to total about $1.4 billion, about $1 billion remains for new grant

agreements in fiscal years 2002 and 2003. (Table 2 summarizes FTA’s

commitment authority and funding commitments.)

 18This contingent commitment authority is designed to allow FTA to execute grant

agreements that extend beyond the 6-year period. TEA-21 authorized contingent

commitments in an amount equivalent to the last 2 years of “guaranteed” funding

authorized by the act. The fiscal year 2001 appropriations act for the DOT increased FTA’s

contingent commitment authority to an amount equivalent to the last 3 fiscal years of

funding.

Record Amounts Provided

for New Starts Program

But Most Have Been

Committed
Page 18 GAO-01-987 New Starts Program Funding Constraints

Table 2: FTA’s New Starts Commitment Authority and Funding Commitments, May

2001

Dollars in millions

 Commitment authority and funding commitments

Amount ($)

Commitment authority

TEA-21 $6,092.40

Contingent commitment authority 3,409.20

Commitment authority for Bay Area Rapid Transit (BART)a453.56

Otherb30.99

Total commitment authority $9,986.15

Funding commitments

ISTEA FFGAs ($3,726.38)

TEA-21 FFGAs (3,795.20)

Project management oversight (48.15)

Mandated projectsc (468.40)

Otherd(916.71)

Total funding commitments ($8,954.84)

Remaining commitment authority $1031.31

a

ISTEA provided $272.95 million of commitment authority for BART, and the fiscal year 2001 DOT

appropriations act provided an additional $180.61 million.

b

Includes reallocated funds from unobligated balances of fiscal year 2000 appropriations ($26.99

million) and $4 million in appropriations beyond the “guaranteed” authorization in fiscal year 2001.

c

Includes congressionally mandated capital projects for Alaska, Hawaii, Chicago, and Dulles.

d

Includes all project costs not covered by grant agreements, such as preliminary engineering costs.

Note: Numbers do not add due to rounding.

Source: FTA.

Implementing FTA’s New Starts report and budget proposal for fiscal year

2002 would reduce FTA’s remaining commitment authority by over onehalf—leaving about $462 million for new grant agreements in fiscal

year 2003. The budget proposes $84.0 million for five new projects and

$37.2 million for the two projects with pending grant agreements for fiscal

year 2002. However, the $121.2 million requested for these projects for

2002 will be only a “down payment” on what would amount to a total

federal commitment of $569.3 million for these seven projects over the

next several years, if no changes were made to the current project

proposals.19 This would leave FTA with $462 million for new grant

 19FTA will enter the period covered by the next authorization legislation with significant

outstanding commitments, as at the beginning of the 6-year period covered by TEA-21.
Page 19 GAO-01-987 New Starts Program Funding Constraints

agreements, which may not be enough to cover the projects that could be

ready for grant agreements during fiscal year 2003. For example, FTA

estimates that about 14 projects will be in or ready to enter the final design

phase at the end of fiscal year 2002—signaling that they are ready to

execute grant agreements and begin construction.

To preserve commitment authority for future projects, FTA did not request

any funding for preliminary engineering activities in the fiscal year 2002

budget. According to FTA, it has provided an average of $150 million a

year from fiscal year 1998 through fiscal year 2001 for projects’

preliminary engineering activities. However, FTA did not allocate any

funds for preliminary engineering activities in fiscal year 2002, nor does it

plan to do so for fiscal year 2003. According to a senior FTA official, this

approach helps to conserve funds for existing and new grant agreements

in fiscal year 2003 and to ensure that funds are provided only to projects

that are ready to move forward. The official further noted that projects

may use other federal funding for preliminary engineering activities, and

no project should be negatively affected if New Starts funding was not

provided for these activities in fiscal years 2002 and 2003. Officials from

several transit projects in the preliminary engineering phase whom we

contacted indicated that they would use other federal funds and/or state

and local funds to pay for their preliminary engineering work.

FTA could more than double the amount of commitment authority

projected to be available for new projects in fiscal year 2003 by making

some or all of the $647 million in commitment authority currently reserved

for two suspended segments of the Los Angeles subway project available

for all projects competing for New Starts funding. The Los Angeles

project’s grant agreement, which was executed in May 1993, committed a

total of $1.4 billion20 to the project’s three segments—North Hollywood,

Eastside, and Mid-City. The North Hollywood segment began operations in

June 2000. However, construction on the two other segments—Eastside

and Mid-City—was suspended in 1998 due to the Los Angeles County

Metropolitan Transportation Authority’s (MTA) financial difficulties.21

 20This includes changes made to the grant agreement in December 1994.

21See Mass Transit: Challenges in Evaluating, Overseeing, and Funding Major Transit

Projects (GAO/T-RCED-00-104, Mar. 8, 2000); and Surface Infrastructure: Review of the

Los Angeles County Metropolitan Transportation Authority’s Restructuring Plan

(GAO/RCED-98-237R, Jul. 9, 1998).

Commitment Authority

Could Be Made Available

for Additional Projects
Page 20 GAO-01-987 New Starts Program Funding Constraints

Since 1998, MTA has been studying alternative transit investment options

for the Eastside and Mid-City segments. In October 2000, FTA approved

the Eastside segment’s advancement to the preliminary engineering stage

with a light rail line rather than a subway as originally planned.22 MTA is

still conducting alternatives analyses for the Mid-City segment. The

original grant agreement provided for a federal commitment of about $735

million to the Eastside and Mid-City subway segments. About $88 million

of the $735 million has been appropriated for these segments through

2001. FTA advised MTA in July 1999 that FTA no longer had funding

commitments for the Eastside or Mid-City segments and that it would

evaluate projects once identified for these corridors under the New Starts

criteria. However, FTA continues to reserve $647 million in commitment

authority for these segments. Consequently, FTA is significantly

understating its remaining commitment authority. An FTA official told us

that FTA has not released the commitment authority reserved for this

project because such authority was not needed to make funding

commitments to other projects ready for grant agreements.

FTA could also increase the remaining commitment authority available for

projects competing for New Starts funds by “releasing” the $409 million

committed to the Seattle (Central Link LRT MOS-1) project if the project is

not ready to move forward before funding decisions for fiscal year 2003

are made. The grant agreement for the Seattle project, which was signed in

January 2001, commits a total of $500 million in New Starts funds. A total

of $91 million was appropriated to this project through fiscal year 2001,

leaving a federal commitment of $409 million. However, this grant

agreement is currently under review due to increases in the overall costs

and delays in the project’s implementation schedule. In April 2001, DOT’s

Inspector General recommended that the Secretary of DOT hold funds and

funding decisions for this project until a specific set of actions related to

cost estimation, project scope, cost control, and overall financing plans

had been implemented. FTA and project officials have begun

implementing these actions, and FTA did not propose New Starts funding

for the project in 2002.

“Releasing” the amounts committed to one or both of these projects would

significantly increase FTA’s flexibility to execute grant agreements for

 22The total expected New Starts commitment for this project is $402 million. However,

FTA does not expect this segment to be ready for final design before funding decisions for

fiscal year 2003 are made.
Page 21 GAO-01-987 New Starts Program Funding Constraints

projects ready to move forward and begin construction in fiscal year 2003

and provide funds for preliminary engineering activities. Such action

would not preclude the Los Angeles or Seattle projects from securing New

Starts funding in the future. Rather, these projects would be treated like all

other projects—that is, they would compete in future New Starts

evaluation processes to determine if they should be recommended for

grant agreements.

The President’s fiscal year 2002 budget recommends limiting New Starts

funding to 50 percent of total project costs starting in fiscal year 2004.23

(Currently, New Starts funding—and all federal funding—is capped at 80

percent.) According to FTA, this proposal is consistent with its recent

practice of seeking a local commitment of more than 20 percent in order

to manage the increasing demand for New Starts funding. For example, as

of February 2001, there were over 110 planning studies considering major

transit capital investments, 28 New Starts projects in the preliminary

engineering phase, and 13 projects in the final design stage. FTA estimates

these projects would require about $80 billion in local, state, and federal

funds to complete.

According to FTA, limiting the New Starts funding to 50 percent will

ensure that local governments play a major role in funding New Starts

projects. Local governments will need to decide to apply either other

federal funds or local funds to proposed New Starts projects based on

their priorities. An FTA official also pointed out that a 50-percent cap

would allow more projects to receive New Starts funding; however, the

official also acknowledged that limiting New Starts funding may prevent

some projects from being developed or moving forward because of limited

local funding.

The proposed cap could affect a number of projects currently being

developed. For example, 15 of the 40 projects that were evaluated this

year and currently in the final design or preliminary engineering stages

plan to use New Starts funds to pay for over 50 percent of their total costs.

The projected use of New Starts funds for these 15 projects ranges from 61

percent for Chicago (North Central Corridor Commuter Rail) to 80 percent

for New Orleans (Canal Streetcar Spine). According to officials from

 23According to FTA, total federal participation in any given transit project would remain

capped at 80 percent. The proposed cap would limit only the percentage of New Starts

funds available for projects. Transit projects could use other federal funds available (e.g.,

flexible funding) to secure total federal support for up to 80 percent of the project’s costs.

Administration Proposes

50-Percent Cap for New

Starts Funding
Page 22 GAO-01-987 New Starts Program Funding Constraints

several of these transit agencies, the impact of the proposed cap would

vary. For example, an official from one project stated that the project

would not be able to tap into any other funding sources to account for

lower than planned New Starts funding. In contrast, an official from

another project was confident that the project would be able to apply

additional federal and local funds to make up for the reduced New Starts

funding.

As FTA approaches the end of the TEA-21 authorization period, it faces

funding constraints for the New Starts program. The implementation of

FTA’s fiscal year 2002 New Starts proposal would reduce its remaining

commitment authority by over one-half, leaving less than $500 million for

new projects in fiscal year 2003. This may not be enough to fund the 14

projects that FTA believes will be ready to begin construction in fiscal

year 2003. Because of this impending “budget crunch,” it is important that

FTA adopt the recommendation we made last year that it further prioritize

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

for funding purposes. This would ensure that the “best” projects receive

New Starts funding and allow for a better understanding of why certain

projects with similar ratings may receive funding while others do not.

In addition, FTA could significantly increase its ability to make funding

commitments to new projects through fiscal year 2003 and the next

authorization if it adopted the practice of “releasing” commitment

authority associated with projects for which it has withdrawn a funding

commitment. For example, although two segments of the Los Angeles

project have been suspended for over 3 years, have been or will be

completely redesigned, and are not likely to be ready for construction by

next year, FTA continues to reserve about $650 million in commitment

authority associated with the original project—which significantly

understates FTA’s remaining commitment authority. Similarly, when other

projects with federal funding commitments do not move forward as

expected, FTA needs to reconsider and adjust its commitment authority

accordingly. Taking these actions would give FTA additional funding

flexibility for the New Starts program.

We recommend that the Secretary of Transportation direct the

Administrator of FTA to make commitment authority allocated to projects

for which the federal funding commitments have been withdrawn

available for all projects competing for New Starts funding. Specifically,

we recommend that FTA “release” the $647 million reserved for the Los

Angeles project.

Conclusions

Recommendation for

Executive Action
Page 23 GAO-01-987 New Starts Program Funding Constraints

We provided DOT with a draft of this report for review and comment. FTA

did not provide any comments or technical clarifications on the draft. In

addition, FTA indicated that further consideration will be necessary before

a decision is made on the report’s recommendation.

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 years 2001 and 2002, the new regulations for New Starts transit

projects, and documents related to New Starts funding. We also

interviewed appropriate FTA headquarters officials and officials from the

Baltimore, New Orleans, Hartford, San Juan, Nashville, and Chicago New

Starts projects. We performed our work in accordance with generally

accepted government auditing standards from May through July 2001.

We are sending copies of this report to the Secretary of Transportation,

the Administrator of the Federal Transit Administration, the Director of

the Office of Management and Budget, and other interested parties. We

will make copies available to others upon request.

If you have questions regarding this report, please contact me on (202)

512-2834 or at heckerj@gao.gov. Key contributors to this report were Nikki

Clowers, Helen Desaulniers, Susan Fleming, and Ron Stouffer.

JayEtta Z. Hecker

Director, Physical Infrastructure Issues

Agency Comments

Scope and

Methodology
Appendix I: Criteria and Related Performance

Measures for New Starts Proposals

Page 24 GAO-01-987 New Starts Program Funding Constraints

Table 3 presents a summary of each of the New Starts criteria and the

related performance measures that the Federal Transit Administration

(FTA) uses to appraise candidate New Starts projects as part of its

evaluation and rating process.

Table 3: Summary of Evaluation Criteria and Performance Measures for New Starts

Proposals

Criterion Performance measure

Mobility improvementsa • 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-effectivenessa Incremental cost per incremental rider

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

a

FTA’s final rule made changes to the performance measures used for mobility improvements and

cost-effectiveness. Specifically, the measure for mobility improvements now includes the number of

job destinations served by the system, and the measure for cost-effectiveness has been changed to

transportation system user benefits. These changes will be incorporated into next year’s evaluation

process.

Source: FTA.

Appendix I: Criteria and Related

Performance Measures for New Starts

Proposals
Appendix II: FTA’s Fiscal Year 2002 New

Starts Ratings and Funding Recommendations

Page 25 GAO-01-987 New Starts Program Funding Constraints

Dollars in millions

Location/project

Overall project

rating

FY 2002

recommended

funding

Existing full funding grant agreementsa

Atlanta – North Springs FFGA $25.07

Boston – South Boston Piers Transitway

(Phase I)

FFGA 11.20

Chicago – Douglas Branch Reconstruction FFGA 35.00

Dallas – North Central LRT Extension FFGA 71.20

Denver – Southeast Corridor LRT FFGA 71.80

Denver – Southwest Corridor LRT FFGA 0.19

Ft. Lauderdale – Tri-Rail Commuter Rail

Upgrade

FFGA 84.83

Houston – Regional Bus Plan FFGA 0.10

Los Angeles – North Hollywood FFGA 49.69

Memphis – Medical Center Extension FFGA 20.00

Minneapolis – Hiawatha Corridor LRT FFGA 50.00

Newark – Rail Link (MOS-1) FFGA 20.00

Northern New Jersey – Hudson-Bergen

LRT (MOS-1)

FFGA 151.33

Northern New Jersey – Hudson-Bergen

(MOS-2)

FFGA 0.00

Pittsburgh – Stage II LRT Reconstruction FFGA 20.00

Portland – Interstate MAX LRT Extension FFGA 80.09

Sacramento – South LRT Extension FFGA 0.33

Salt Lake City – CBD to University LRT FFGA 15.00

Salt Lake City – North-South LRT FFGA 0.72

San Diego – Mission Valley East LRT

Extension

FFGA 65.00

San Francisco – BART Extension to Airport FFGA 80.61

San Jose – Tasman West LRT FFGA 0.11

San Juan – Tren Urbano FFGA 50.16

Seattle – Central Link LRT (MOS-1) FFGA 0.00

St. Louis – Metrolink St. Clair Extension FFGA 31.09

Washington, DC/MD – Largo Extension FFGA 60.00

Subtotal $993.51

Proposed full funding grant agreements

Baltimore – Central LRT Double-Tracking Recommendedb $18.11

Chicago – Metra South West Corridor

Commuter Rail

Recommendedb 19.12

Chicago – Metra North Central Commuter

Rail

Recommended 23.00

Chicago – Metra UP West (Kane)

Commuter Rail

Recommended 20.00

Miami – South Miami-Dade Busway

Extension

Exemptc 5.00

New Orleans – Canal Streetcar Spine Recommended 23.00

Appendix II: FTA’s Fiscal Year 2002 New

Starts Ratings and Funding

Recommendations
Appendix II: FTA’s Fiscal Year 2002 New

Starts Ratings and Funding Recommendations

Page 26 GAO-01-987 New Starts Program Funding Constraints

Dollars in millions

Location/project

Overall project

rating

FY 2002

recommended

funding

San Diego – Oceanside Escondido Rail Highly recommended 13.00

Subtotal $121.23

Projects in final design

Little Rock – River Rail Project Exemptc0.00

Los Angeles – LOSSAN Rail Corridor

Improvement

Exemptc 0.00

San Francisco – Third Street Light Rail

(Phase I)

Recommended 0.00

Seattle – Central Link LRT (MOS-2 and

MOS-3)

Not ratedd0.00

Subtotal $0.00

Projects in preliminary design

Alaska – Alaska Railroad Girdwood

Commuter Rail

Exemptc$0.00

Austin – Austin Area LRT System Not recommended 0.00

Charlotte – South Corridor LRT Recommended 0.00

Chicago – CTA Ravenswood Line

Expansion

Recommended 0.00

Cincinnati – I-71 Corridor Not recommended 0.00

Cleveland – Euclid Corridor Improvement

Project

Recommended 0.00

Hartford – New Britain-Hartford Busway Recommended 0.00

Houston – Downtown to Astrodome Light

Rail

Recommended 0.00

Kansas City, Johnson County I-35

Commuter Rail

Exemptc0.00

Las Vegas – Resort Corridor Fixed

Guideway MOS

Recommended 0.00

Los Angeles – Eastside Corridor LRT Recommended 0.00

Los Angeles – San Fernando Valley

Corridor

Recommended 0.00

Maryland – MARC Commuter Rail

Improvements

Not ratedd0.00

Miami – North 27th Avenue Corridor Not recommended 0.00

Minneapolis-Rice, MN – Northstar Corridor

Commuter Rail

Recommended 0.00

Nashua, NH – Nashua-Lowell Commuter

Rail Extension

Exemptc0.00

Nashville – East Corridor Commuter Rail Exemptc0.00

New Orleans – Desire Corridor Streetcar Recommended 0.00

New York – Long Island Railroad East Side

Access

Recommended 0.00

Orange County, CA – Centerline Rail

Corridor

Recommended 0.00

Phoenix – East Valley Light Rail Not ratedd 0.00

Pittsburgh – North Shore Connector LRT Recommended 0.00
Appendix II: FTA’s Fiscal Year 2002 New

Starts Ratings and Funding Recommendations

Page 27 GAO-01-987 New Starts Program Funding Constraints

Dollars in millions

Location/project

Overall project

rating

FY 2002

recommended

funding

Raleigh – Regional Transit Plan (Phase I) Recommended 0.00

San Diego – Mid Coast Corridor Highly recommended 0.00

San Juan – Minillas Extension Recommended 0.00

Seattle – Everett-Seattle Commuter Rail Exemptc0.00

Stamford, CT – Urban Transitway and

Intermodal Transportation Center

Improvements

Recommended 0.00

Tacoma – Lakewood-Tacoma Commuter

Rail

Exemptc0.00

Washington County, OR – WilsonvilleBeaverton Commuter RailExemptc0.00

Washington, D.C. – Dulles Corridor Rapid

Transit

Recommended 0.00

Subtotal $0.00

Other

Ferry capital projects in Alaska or Hawaii $10.30

Project management oversight 11.36

Subtotal $21.66

Grand total $1,136.40

Legend

FFGA = full-funding grant agreement

LRT = light rail transit

MOS = minimum operable segment

Note: Figures might not add to totals because of rounding.

a

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

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

recommended to receive the fiscal year 2002 amount committed by the FFGA.

b

The ratings for Chicago (Metra South West Corridor Commuter Rail) and Baltimore (Central LRT

Double Tracking) are the ratings they received for fiscal year 2001. According to FTA, these ratings

are still valid.

c

Projects rated “exempt” (10) were not rated because an exemption is granted to projects when the

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

d

Projects listed as “not rated” (4) were not rated because insufficient information precluded a

complete evaluation of these projects.

Source: FTA’s New Starts Report for fiscal years 2001 and 2002.

(542000)

The first copy of each GAO report is free. Additional copies of reports are

$2 each. A check or money order should be made out to the

Superintendent of Documents. VISA and MasterCard credit cards are also

accepted.

Orders for 100 or more copies to be mailed to a single address are

discounted 25 percent.

Orders by mail:

U.S. General Accounting Office

P.O. Box 37050

Washington, DC 20013

Orders by visiting:

Room 1100

700 4th St., NW (corner of 4th and G Sts. NW)

Washington, DC 20013

Orders by phone:

(202) 512-6000

fax: (202) 512-6061

TDD (202) 512-2537

Each day, GAO issues a list of newly available reports and testimony. To

receive facsimile copies of the daily list or any list from the past 30 days,

please call (202) 512-6000 using a touchtone phone. A recorded menu will

provide information on how to obtain these lists.

Orders by Internet

For information on how to access GAO reports on the Internet, send an email message with “info” in the body to:

Info@www.gao.gov

or visit GAO’s World Wide Web home page at:

http://www.gao.gov

Contact one:

• Web site: http://www.gao.gov/fraudnet/fraudnet.htm

• E-mail: fraudnet@gao.gov

• 1-800-424-5454 (automated answering system)

Ordering Information

To Report Fraud,

Waste, and Abuse in

Federal Programs