United States Government Accountability Office

GAO Report to Congressional Committees

PUBLIC 

TRANSPORTATION 

Future Demand Is 

Likely for New Starts 

and Small Starts 

Programs, but 

Improvements Needed 

to the Small Starts 

Application Process 

July 2007 

 

GAO-07-917 
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

July 2007

PUBLIC TRANSPORTATION 

Future Demand Is Likely for New Starts 

and Small Starts Programs, but 

Improvements Needed to the Small Starts 

Application Process 

Highlights of GAO-07-917, a report to 

congressional committees 

Through the New Starts program, 

the Federal Transit Administration 

(FTA) identifies and recommends 

new fixed-guideway transit 

projects for funding. The Safe,

Accountable, Flexible, Efficient 

Transportation Equity Act: A 

Legacy for Users (SAFETEA-LU) 

created a separate program,

commonly called Small Starts, 

which is intended to offer a

streamlined evaluation and rating

process for smaller-scale transit

projects. FTA subsequently

introduced a separate eligibility

category within the Small Starts 

program for “Very Small Starts”

projects. These are simple, low-risk 

projects that qualify for a simplified 

evaluation and rating process.

SAFETEA-LU requires GAO to 

annually review FTA’s New Starts 

process. This report presents 

information on (1) FTA’s fiscal year 

2008 funding recommendations, 

(2) the extent to which the New 

Starts pipeline has changed over

time, and (3) future projected 

trends for the New Starts and Small 

Starts pipelines. To address these 

objectives, GAO surveyed 215 

project sponsors—78 percent of

which responded—and interviewed 

FTA officials, 15 project sponsors,

and 3 industry groups. 

What GAO Recommends

GAO recommends that FTA make 

several program improvements, 

including further streamlining the 

Small Starts application process. 

FTA officials agreed to consider 

GAO’s recommendations. 

For the fiscal year 2008 evaluation cycle, FTA recommended to Congress 10

New Starts and 4 Small Starts projects for funding. The administration’s 

budget request of $1.40 billion is primarily allocated to New Starts projects

with existing and pending full funding grant agreements. SAFETEA-LU made 

several changes to the New Starts evaluation and rating process, which FTA 

is implementing. 

Since the fiscal year 2001 evaluation and rating cycle, the New Starts 

pipeline—that is, projects in the preliminary engineering and final design 

phases—has changed in size and composition, responding to a variety of 

factors. The number of projects in the New Starts pipeline has decreased by 

more than one-half, and the types of projects in the pipeline have changed, 

with bus rapid transit replacing commuter or light rail as the most common 

type of project. FTA officials attributed the decrease in the number of 

projects to FTA’s increased scrutiny of applications to help ensure that only 

the strongest projects enter the pipeline, and to FTA’s efforts to remove 

projects from the pipeline that were not advancing or did not adequately

address identified problems. Project sponsors that GAO interviewed cited 

other reasons for the pipeline’s decrease, including the complexity, 

lengthiness, and cost of the New Starts process. The lengthy nature of the 

New Starts process is due, in part, to the rigorous and systematic evaluation 

and rating process established by law—which GAO has previously noted 

could serve as a model for other programs. Other reasons cited by project 

sponsors for the decrease in the pipeline include finding alternative sources 

of funding or opting not to apply because they realize their projects are 

unlikely to receive funding. FTA is considering different ideas on how to 

improve the New Starts process, some of which may address the concerns 

identified by project sponsors. 

Despite these concerns, GAO’s survey of project sponsors indicated future 

demand for New Starts funding. Project sponsors reported having 141 

planned New Starts, Small Starts, and Very Small Starts projects and will 

likely seek New Starts funding for almost three-fourths of these projects. Of 

these planned projects, project sponsors indicated that they intend to seek 

New Starts funding for 57 New Starts projects, 30 Small Starts projects, and 

14 Very Small Starts projects. Project sponsors GAO surveyed also reported 

considering a range of alternative project types in their planning. Although 

project sponsors expressed appreciation for the creation of the Small Starts 

program, noting it filled a funding gap, they said the Small Starts application 

process is not tailored to the Small Starts program and is time-consuming, 

costly, and duplicative. GAO also found that the application is not always 

tailored for Small Starts applicants and, in several instances, requests 

duplicative information. FTA officials acknowledged that the Small Starts 

application process could be further streamlined, and they are working to 

decrease the burden. 

www.gao.gov/cgi-bin/getrpt?GAO-07-917.

To view the full product, including the scope 

and methodology, click on the link above. To 

view the e-supplement online, click on 

www.gao.gov/cgi-bin/getrpt?GAO-07-927SP. 

For more information, contact Katherine 

Siggerud at (202) 512-2834 or 

siggerudk@gao.gov. 
Contents 

Letter 1

Results in Brief 4 

Background 7

FTA Recommended 14 Projects for Fiscal Year 2008 Funding; 

SAFETEA-LU Changes to Evaluation and Rating Process Remain 14 

Changes in the Size and Composition of the New Starts Pipeline 

Are Likely Due to Different Factors 22 

Future Demand for New Starts Program Expected; Project 

Sponsors Seek Small Starts Program Improvements 30 

Conclusions 36

Recommendations for Executive Action 37 

Agency Comments 38 

Appendix I Scope and Methodology 39 

Appendix II GAO Contact and Staff Acknowledgments 43 

Related GAO Products 44 

Tables 

Table 1: Projects Recommended for an FFGA and Other Funding, 

Fiscal Year 2008 15 

Table 2: Small Starts and Very Small Starts Projects, Fiscal Year 

2008 16 

Table 3: Implementation of SAFETEA-LU Changes to the New 

Starts Evaluation and Rating Process, as of July 2007 19 

Table 4: Number of Projects in the Pipeline, and Evaluated and 

Rated, by Fiscal Year 23 

Table 5: Total Dollar Amounts and Numbers of New Starts FFGAs, 

by Fiscal Year 24 

Table 6: New Starts, Small Starts, and Very Small Starts Application 

Requirements 33

Page i GAO-07-917 Public Transportation
Figures 

Figure 1: Planning and Development Process for New Starts 

Projects 9

Figure 2: Project Evaluation Criteria for New Starts Projects 10 

Figure 3: Planning and Development Process for Small Starts and 

Very Small Starts Projects 13 

Figure 4: Planned Uses of the Administration’s Proposed Fiscal 

Year 2008 Funding for the Capital Investment Grants 

Program 18

Figure 5: Types of Projects in the New Starts Pipeline, by Fiscal 

Year 25

Figure 6: Project Sponsors’ Expected Use of New Starts Funding 

for Planned New Starts, Small Starts, and Very Small 

Starts Projects 31 

Abbreviations 

FFGA full funding grant agreement 

FTA Federal Transit Administration 

PCGA project construction grant agreement 

SAFETEA-LU Safe, Accountable, Flexible, Efficient Transportation 

 Equity Act: A Legacy for Users 

This is a work of the U.S. government and is not subject to copyright protection in the 

United States. It may be reproduced and distributed in its entirety without further 

permission from GAO. However, because this work may contain copyrighted images or 

other material, permission from the copyright holder may be necessary if you wish to 

reproduce this material separately. 

Page ii GAO-07-917 Public Transportation
United States Government Accountability Office

Washington, DC 20548 

 

July 27, 2007

The Honorable Christopher J. Dodd 

Chairman 

The Honorable Richard Shelby 

Ranking Member 

Committee on Banking, Housing, and Urban Affairs 

United States Senate 

The Honorable James L. Oberstar 

Chairman 

The Honorable John L. Mica 

Ranking Republican Member 

Committee on Transportation and Infrastructure 

House of Representatives 

Since the early 1970s, a significant portion of the federal government’s 

share of new capital investment in mass transportation has come through 

the Federal Transit Administration’s (FTA) New Starts program. Through 

this program, FTA identifies and recommends new fixed-guideway transit 

projects—including heavy, light, and commuter rail; ferry; and certain bus 

projects—for grants, typically through full funding grant agreements 

(FFGA).1

 An FFGA establishes the terms and conditions for federal funds 

available for the project, including the maximum amount of federal funds 

available. Over the last decade, the New Starts program has provided state 

and local agencies with over $10 billion to help design and construct 

transit projects throughout the country. 

More recently, the Safe, Accountable, Flexible, Efficient Transportation 

Equity Act: A Legacy for Users (SAFETEA-LU) created, and FTA 

 1

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

public transportation services. These fixed-guideway systems include fixed rail, exclusive 

lanes for buses and other high-occupancy vehicles, and other systems.

Page 1 GAO-07-917 Public Transportation
implemented, what is commonly called the Small Starts program.2

 This 

program is intended to advance smaller-scale projects through an 

expedited and streamlined evaluation and rating process. Small Starts 

projects are defined as those with a need for less than $75 million in 

funding from this program and a total capital cost of less than $250 

million.3

 FTA subsequently introduced a new eligibility category within the 

Small Starts program called Very Small Starts, which is for projects with a 

total capital cost of less than $50 million. Very Small Starts projects will 

qualify for an even simpler and more expedited evaluation and rating 

process than other Small Starts projects. In July 2006, FTA issued interim 

guidance on Small Starts, including Very Small Starts, to govern the 

administration of the program until the final rule is issued. FTA expects to

issue the final rule in April 2008. 

Although SAFETEA-LU made a number of changes to the New Starts 

program, including the creation of the Small Starts program, it also 

maintained many program requirements imposed by previous authorizing 

legislation. For example, FTA must continue to prioritize projects for 

funding by evaluating, rating, and recommending potential projects on the 

basis of specific financial commitment and project justification criteria—

including mobility improvements, cost-effectiveness, economic 

development, land use, environmental benefits, and operating efficiencies.

Using these statutorily identified criteria, FTA evaluates potential projects 

annually and as a condition for advancement into each phase of the 

process, including preliminary engineering, final design, and construction. 

 2

Although SAFETEA-LU did not create a separate Small Starts program, it established 

various requirements to be applied to projects receiving capital investment grants of less 

than $75 million and where the total estimated net capital cost of the project is less than 

$250 million. FTA consistently refers to this authority as the Small Starts program in its 

regulations, annual report, and guidance. Thus, for the purposes of this report, we refer to

Small Starts as a program. Safe, Accountable, Flexible, Efficient Transportation Equity Act: 

A Legacy for Users, Pub. L. No. 109-59, title III, § 3011, 119 Stat. 1573 (2005), codified as 

positive law at 49 U.S.C. § 3509. See, in particular, 49 U.S.C. § 3509(e). 

3

Transit projects that qualify for the Small Starts program are referred to as “Small Starts 

projects” in this report as well as in FTA’s guidance and reports. Transit projects that do

not qualify for the Small Starts program because they request more federal funding, or are

larger in scope, than is permitted by 49 U.S.C. § 5309(e) are referred to as “New Starts 

projects.” Thus, in this report, we use the term “New Starts” in two contexts: (1) to identify

projects that are larger in scope than is permitted by 49 U.S.C. § 5309(e) and (2) as a

reference to the entire capital investment grants program that is subject to 49 U.S.C. §

5309(d) or (e). As used in this report, “New Starts projects” refer to projects that do not

qualify as Small Starts, while “New Starts program,” “New Starts funding,” and “New

Starts pipeline” refer generally to the capital investment grants program. 

Page 2 GAO-07-917 Public Transportation
FTA refers to projects in the preliminary engineering or final design 

phases as the “pipeline” through which successful projects advance to 

receive funding. FTA determines which projects to fund through an 

evaluation and rating process, whereby projects are evaluated on the basis 

of various criteria and then are assigned a “high,” “medium,” or “low” 

rating. 

We are required to report each year on FTA’s processes and procedures 

for evaluating, rating, and recommending New Starts projects for federal 

funding and on FTA’s implementation of these processes and procedures.4

This report examines (1) how many and what types of projects FTA 

evaluated, rated, and recommended for funding in the fiscal year 2008 

evaluation and rating cycle, and the extent to which FTA has implemented 

SAFETEA-LU’s changes to the New Starts evaluation and rating process; 

(2) the extent to which, if any, the New Starts pipeline has changed since 

the fiscal year 2001 evaluation and rating cycle, and the factors that 

contributed to any such trends; and (3) any projected trends for the New 

Starts and Small Starts pipelines and the views of project sponsors on the 

Small Starts program. To address these objectives, we surveyed all project

sponsors that are located in urbanized areas with a population of over 

200,000 and that have an annual transit ridership of over 1 million.5

 In total, 

we surveyed 215 project sponsors, asking them about their experience to

date with the New Starts program and plans to apply for the program in 

the future. Of the 215 project sponsors, 168 responded to the survey—for a 

survey response rate of 78 percent. The survey and a more complete 

tabulation of the results can be viewed at 

www.gao.gov/cgi-bin/getrpt?GAO-07-927SP. We also interviewed 15 

project sponsors, including the 10 sponsors that applied for funding for 

Small Starts projects, including Very Small Starts projects, for the fiscal 

year 2008 evaluation cycle. We selected the other 5 project sponsors that 

we interviewed on the basis of their agencies’ experience with the New 

Starts processes, size, and location. In addition, we interviewed FTA 

officials and representatives from transportation industry associations. We 

 4

49 U.S.C. § 5309(k)(2). 

5

Project sponsors that we surveyed may or may not have previously applied to the New

Starts program, but because of their size and ridership, these sponsors would be more

likely to plan the types of transit projects that would potentially qualify for New Starts 

funding. Project sponsors are typically transit agencies, but they may also include city 

transportation offices and metropolitan planning organizations, among other entities. In 

this report, project sponsors are current sponsors of transit projects as well as past or

potential sponsors of such projects. 

Page 3 GAO-07-917 Public Transportation
also reviewed FTA’s New Starts and Small Starts guidance, the Advanced

Notice of Proposed Rule Making for Small Starts, and the statutory 

provisions that address the New Starts program. In May 2007, we reported 

on preliminary findings from our work.6

 We conducted our work from 

November 2006 through July 2007 in accordance with generally accepted 

government auditing standards. (See app. I for more information about our 

scope and methodology.) 

For the fiscal year 2008 evaluation cycle, FTA evaluated and rated 18

projects—including 14 New Starts, 1 Small Starts, and 3 Very Small Starts 

projects—and recommended to Congress 14 of these projects for funding. 

Of the 14 New Starts projects rated, 2 were rated as “high,” 12 were rated 

as “medium,” and none were rated as “low.” FTA recommended 10 of the 

14 New Starts projects for funding. Specifically, FTA recommended 2 New 

Starts projects for proposed FFGAs and 2 projects for pending FFGAs.7

 In 

addition, FTA identified 6 “other” New Starts projects that may be eligible

for funding outside of FFGAs in fiscal year 2008. FTA received 12 requests 

to enter project development for Small Starts and Very Small Starts 

projects, and evaluated and rated 4 of them. FTA rated these 4 projects as 

“medium” and recommended them for funding. The administration’s fiscal 

year 2008 budget request for the New Starts program is $1.40 billion. A 

majority of the requested funding is allocated to New Starts projects with 

existing and pending FFGAs and to those proposed for new FFGAs. 

SAFETEA-LU made several changes to the New Starts evaluation and 

rating process, including adding economic development as an evaluation 

criterion and changing the rating scale. FTA is in the process of addressing 

these SAFETEA-LU changes and expects to have them implemented by the 

completion of its upcoming rulemaking. 

Results in Brief 

The New Starts pipeline has changed in size and composition since the 

fiscal year 2001 evaluation and rating cycle, and a variety of factors have 

contributed to these changes. Since the fiscal year 2001 evaluation and 

rating cycle, the number of projects in the New Starts pipeline has 

decreased by more than one-half (from 48 to 19). The level of funding per 

 6

GAO, Preliminary Analysis of Changes to and Trends in FTA’s New Starts and Small 

Starts Programs, GAO-07-812T (Washington, D.C.: May 10, 2007). 

7

Projects with pending FFGAs were previously recommended for FFGAs by FTA; however, 

FFGAs have not been executed. FTA expects to execute both pending FFGAs by the end of 

fiscal year 2007. 

Page 4 GAO-07-917 Public Transportation
project has grown since fiscal year 2001, from about $20 million to about 

$103 million on average. In addition, the types of projects in the pipeline 

have changed, as bus rapid transit projects are now more common than 

commuter or light rail projects, although bus rapid transit projects account 

for a small portion of the total cost (13 percent) for all projects in the 

pipeline. FTA officials and project sponsors offered different reasons for 

the decrease in the New Starts pipeline. FTA officials said that they had 

increased their scrutiny of applications to help ensure that only the 

strongest projects enter the pipeline. According to these officials, they 

took steps to remove projects from the pipeline that were not advancing 

or that did not adequately address identified problems—although the 

officials noted that most project sponsors voluntarily withdrew projects 

from the pipeline, rather than have FTA remove them. Project sponsors we 

interviewed provided other reasons for the decrease in the New Starts 

pipeline. In particular, they maintained that the New Starts process is 

complex, time-consuming, and costly. In addition, project sponsors said 

they found alternative sources of funding or decided not to apply because 

the process is well-established and they realize their projects are unlikely 

to receive funding. Our survey identified similar reasons offered by project

sponsors. For example, the project sponsors we surveyed with completed 

transit projects most often said they did not apply to the New Starts 

program because the process was lengthy or they wanted to move the 

project along faster than could be done in the New Starts process. About 

two-thirds of these project sponsors reported that their most recent 

project was eligible for the New Starts program, yet more than one-fourth

of them did not apply to the program.8

 The lengthiness of the New Starts 

process is due, at least in part, to the rigorous and systematic evaluation 

and rating process established by law—which we have previously noted 

could serve as a model for other transportation programs. FTA has 

recognized that the process can be lengthy and, in 2006, commissioned a 

study to examine, among other issues, opportunities for accelerating and

simplifying the process for implementing the New Starts program. FTA is 

currently reviewing the study’s findings and recommendations. 

Despite these concerns, our survey of project sponsors indicated that 

there is likely to be a future demand for New Starts funding. The project 

sponsors we surveyed reported having 141 planned projects—that is, 

 8

Of the 54 project sponsors with a completed transit project, 35 reported that their most 

recently completed project was eligible for New Starts funding. Of those 35 sponsors, 10 

did not apply to the program.

Page 5 GAO-07-917 Public Transportation
projects currently undergoing an alternatives analysis or another type of 

corridor-based planning study.9

 According to the project sponsors, they 

plan to seek New Starts funding for almost three-fourths (72 percent) of 

these 141 New Starts, Small Starts, or Very Small Starts projects. The 

project sponsors we surveyed also indicated that they were considering a 

range of project alternative types in their planning. The most commonly 

cited types were bus rapid transit and light rail. Our survey results further 

indicated that, through its Small Starts and Very Small Starts programs, 

FTA is attracting project sponsors that would not otherwise apply for the 

New Starts program or that have not previously applied to the New Starts 

program. For example, of 30 project sponsors that intend to seek New 

Starts funding for their planned Small Starts or Very Small Starts projects, 

13 have not previously applied for New Starts funding.10 Although project 

sponsors we interviewed expressed appreciation for the creation of the 

Small Starts program, noting that it fulfilled a funding gap, they said the 

Small Starts application process is not tailored to the Small Starts program 

and is time-consuming, costly, and duplicative. They suggested, for 

example, that FTA further streamline the Small Starts application process 

by eliminating requests for information already requested in required 

worksheets. We also found that the application is not always tailored for 

Small Starts applicants and, in several instances, requests duplicative 

information. FTA officials acknowledged that the Small Starts application

process could be further streamlined, and they are working to decrease 

the burden. The project sponsors we interviewed, especially those that 

have never applied for New Starts funding, would also like more 

assistance from FTA on how to complete the application process. 

According to FTA, 8 of the 12 applications for fiscal year 2008 were 

incomplete or the proposed projects were ineligible. In some instances, 

project sponsors did not understand what constitutes an eligible project. 

We found that although FTA’s Small Starts guidance outlines the elements

required for a project to receive funding, such as traffic signal

priority/preemption, level boarding, or branding of the proposed service, it

 9

An alternatives analysis (also known as a major investment study or a multimodal corridor

analysis) is conducted to evaluate a range of transportation alternatives (including the

appropriate modal and alignment options) developed to address transportation problems 

and mobility needs in a given corridor. The alternatives analysis is intended to provide

information to local officials on the benefits, costs, and impacts of alternative 

transportation investments developed to address the purpose and need for an improvement 

in the corridor. 

10Thirty project sponsors that responded to our survey intend to seek New Starts funding 

for their planned Small Starts or Very Small Starts projects. However, 2 of those sponsors 

did not answer whether they had previously applied for any New Starts funding. 

Page 6 GAO-07-917 Public Transportation
does not explicitly identify as ineligible those projects that have already 

begun to incrementally incorporate certain Small Starts elements. 

This report contains three recommendations to the Secretary of 

Transportation to improve the Small Starts program. To facilitate 

information sharing about the program, FTA should develop a Small Starts 

working group and conduct training for applicants. To ensure that project 

sponsors better understand what types of projects are eligible for funding

as Small Starts, FTA should clarify in its guidance that a project must 

include all of the required elements listed in the program guidance and 

must also be providing new service. Finally, to ensure that the Small Starts 

program provides a streamlined application process for applicants, FTA 

should continue to refine its Small Starts application process. 

The Department of Transportation, including FTA, reviewed a draft of this

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

and agreed to consider our recommendations. They also provided 

technical clarifications, which we incorporated as appropriate. 

SAFETEA-LU authorized over $45 billion for federal transit programs, 

including $8 billion for the New Starts program, from fiscal years 2005 

through 2009. Under the New Starts program, FTA identifies and 

recommends fixed-guideway transit projects for funding—including heavy, 

light, and commuter rail; ferry; and certain bus projects (such as bus rapid 

transit). SAFETEA-LU also made changes to the New Starts program, 

including changes to its evaluation and rating process. FTA already has 

implemented some of these changes and has undertaken efforts to address 

the remaining changes. 

Background 

FTA generally funds New Starts projects through FFGAs, which establish 

the terms and conditions for federal participation in a New Starts project. 

FFGAs also define a project’s scope, including the length of the system 

and the number of stations; its schedule, including the date when the 

system is expected to open for service; and its cost. For a project to obtain 

an FFGA, it must progress through a local or regional review of 

alternatives and meet a number of federal requirements, including 

requirements for information used in the New Starts evaluation and rating

process (see fig. 1). As required by federal statute, New Starts projects 

must emerge from a regional, multimodal transportation planning process. 

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

alternatives analysis—address this requirement. The systems planning 

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

Page 7 GAO-07-917 Public Transportation
analysis phase provides information on the benefits, costs, and impacts of 

different options, such as rail lines or bus routes, in a specific corridor 

versus in a region. The alternatives analysis phase results in the selection

of a locally preferred alternative, which is intended to be the New Starts 

project that FTA evaluates for funding, as required by statute. After a 

locally preferred alternative is selected, the project sponsor submits an 

application to FTA for the project to enter the preliminary engineering 

phase.11 When this phase is completed and federal environmental 

requirements are satisfied, FTA may approve the project’s advancement 

into final design,12 after which FTA may approve the project for an FFGA 

and proceed to construction, as provided for in statute. FTA oversees 

grantees’ management of projects from the preliminary engineering phase 

through the construction phase and evaluates the projects for 

advancement into each phase of the process. FTA also evaluates the 

projects annually for the New Starts report to Congress. 

 11During the preliminary engineering phase, project sponsors refine the design of the

proposal, taking into consideration all reasonable design alternatives and estimating their 

costs, benefits, and impacts (e.g., financial or environmental). According to FTA officials, 

to gain approval for entry into preliminary engineering, a project must (1) be identified 

through the alternatives analysis process, (2) be included in the region’s long-term 

transportation plan, (3) meet the statutorily defined project justification and financial 

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

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

available to projects for preliminary engineering activities, if so appropriated by Congress. 

12Final design is the last phase of project development before construction and may include

right-of-way acquisition, utility relocation, and the preparation of final construction plans 

and cost estimates. 

Page 8 GAO-07-917 Public Transportation
Figure 1: Planning and Development Process for New Starts Projects 

Planning

Preliminary

engineering

Final design

Final Design

Commitment of nonfederal 

funding, construction plans, ROW 

acquisition, before-after data

collection plan, FTA evaluation for 

FFGA, begin negotiations

Systems

Planning

Alternatives

Analysis

Select LPA,

MPO action, develop

criteria, PMP

FTA decision 

on entry into preliminary

engineering

FTA decision

on entry into final

design

FFGA

Preliminary Engineering

Complete NEPA process,

refinement of financial plan

Construction

Project 

management 

oversight

Construction

Source: FTA.

Decision point Major development stage

FFGA = full funding grant agreement

FTA = Federal Transit Administration

LPA = locally preferred alternative

MPO = metropolitan planning organization

NEPA = National Environmental Policy Act of 1969

PMP = project management plans

ROW = right-of-way

Legend

Note: The National Environmental Policy Act of 1969, Pub. L. No. 91-190, codified at 42 U.S.C. 

chapter 55, requires detailed statements assessing the environmental impact of and alternatives to 

major federal actions significantly affecting the environment, including grants funding fixed-guideway

projects. 

To help inform administration and congressional decisions about which 

projects should receive federal funds, FTA assigns ratings on the basis of 

Page 9 GAO-07-917 Public Transportation
various statutorily defined evaluation criteria—including both local 

financial commitment and project justification criteria—and then assigns 

an overall rating (see fig. 2).13 These evaluation criteria reflect a broad 

range of benefits and effects of the proposed project, such as costeffectiveness, as well as the ability of the project sponsor to fund the 

project and finance the continued operation of its transit system. FTA 

assigns the proposed project a rating for each criterion and then assigns a 

summary rating for local financial commitment and project justification. 

Lastly, FTA develops an overall project rating. Projects are rated at several 

points during the New Starts process—as part of the evaluation for entry 

into the preliminary engineering and the final design phases, and yearly for 

inclusion in the New Starts annual report to Congress. 

Figure 2: Project Evaluation Criteria for New Starts Projects 

Source: GAO analysis of FTA data.

Summary rating

Local financial commitment

summary rating

Project justification

summary rating

Non-New

Starts share

Capital

finance plan

Operating

finance plan

Mobility

improvements

Environmental

benefits

Operating

efficiencies

Costeffectiveness

Land

use

Other

factors

Note: This figure outlines the criteria FTA currently uses to evaluate New Starts projects, but the 

criteria are subject to change as a result of SAFETEA-LU changes that FTA has yet to make. 

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

rating process, along with the phase of development of New Starts 

 13The exceptions to the evaluation process are statutorily “exempt” projects, which are

those projects with requests for less than $25 million in New Starts funding. Sponsors of 

these projects are not required to submit project justification information (although FTA 

encourages the sponsors to do so). FTA does not rate these projects. As a result, the 

number of projects in the preliminary engineering or final design phases may be greater 

than the number of projects evaluated and rated by FTA. 

Page 10 GAO-07-917 Public Transportation
projects, to decide which projects to recommend to Congress for 

funding.14 Although many projects receive a summary rating that would 

make them eligible for an FFGA, only a few are proposed for an FFGA in a 

given fiscal year. FTA proposes a project for an FFGA when it believes 

that the project will be able to meet the following conditions during the 

fiscal year for which funding is proposed: 

• All nonfederal project funding must be committed and available for the 

project. 

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

enough for uncertainties about costs, benefits, and impacts (i.e., 

environmental or financial) to be minimized. 

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

which confirm that there are no remaining cost, project scope, or local 

financial commitment issues. 

SAFETEA-LU introduced a number of changes to the New Starts program, 

including some that affect the evaluation and rating process that we have

previously described in figure 1. For example, SAFETEA-LU added 

economic development to the list of evaluation criteria that FTA must use

in evaluating and rating New Starts projects and required FTA to issue 

notice and guidance each time significant changes are made to the 

program. SAFETEA-LU also established the Small Starts program, a new 

capital investment grant program, simplifying the requirements imposed 

for those seeking funding for lower-cost projects, such as bus rapid transit, 

streetcar, and commuter rail projects. This program is intended to advance 

smaller-scale projects through an expedited and streamlined evaluation 

and rating process. Small Starts projects require less than $75 million in 

federal funding and have a total cost of less than $250 million. According 

to FTA’s guidance, Small Starts projects must also (1) meet the definition

of a fixed guideway for at least 50 percent of the project length in the peak 

period15 or (2) be a corridor-based bus project with the following minimum 

elements: 

 14The administration’s funding recommendations are made in the President’s budget and

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

February in conjunction with the President’s budget. 

15The fixed-guideway portion need not be contiguous, but it should be located to result in 

faster and more reliable running times.

Page 11 GAO-07-917 Public Transportation
• substantial transit stations; 

• traffic signal priority/preemption, to the extent, if any, that there are traffic 

signals on the corridor; 

• low-floor vehicles or level boarding; 

• branding of the proposed service; and 

• 10-minute peak/15-minute off-peak running times (i.e., headways) or better 

while operating at least 14 hours per weekday. 

FTA has also subsequently introduced a separate eligibility category 

within the Small Starts program for “Very Small Starts” projects. Small 

Starts projects that qualify as Very Small Starts are simple, low-cost 

projects that FTA has determined qualify for a simplified evaluation and 

rating process. These projects must meet the same eligibility requirements 

as Small Starts projects and be located in corridors with more than 3,000 

existing riders per average weekday who will benefit from the proposed 

project. In addition, the projects must have a total capital cost of less than 

$50 million (for all project elements) and a per-mile cost of less than $3 

million, excluding rolling stock (e.g., train cars). 

FTA evaluates Small Starts and Very Small Starts projects using various 

financial and project justification criteria, including cost-effectiveness and

land use. For Small Starts and Very Small Starts, SAFETEA-LU condensed 

the New Starts processes used for large projects. Preliminary engineering

and final design are combined into one phase, referred to as “project 

development.” FTA may recommend proposed Small Starts and Very Small 

Starts for funding after such projects have been approved to enter into 

project development, are “ready” to implement their proposed project, and

continue to be rated at least “medium” for both project justification and

local financial commitment. FTA intends to provide funding for Small 

Starts and Very Small Starts projects through project construction grant 

agreements (PCGA), which are similar to FFGAs (see fig. 3). 

Page 12 GAO-07-917 Public Transportation
Figure 3: Planning and Development Process for Small Starts and Very Small Starts 

Projects 

Note: The National Environmental Policy Act of 1969, Pub. L. No. 91-190, codified at 42 U.S.C. 

chapter 55, requires detailed statements assessing the environmental impact of and alternatives to 

major federal actions significantly affecting the environment, including grants funding fixed-guideway

projects. 

Planning

Project

development

Systems

Planning

Alternatives

Analysis

Select LPA,

MPO action, develop

criteria, PMP

FTA decision 

on entry into project

development

PCGA

Construction

Project 

management 

oversight

Construction

Source: FTA.

Decision point Major development stage

FTA = Federal Transit Administration

LPA = locally preferred alternative

MPO = metropolitan planning organization

NEPA = National Environmental Policy Act 

 of 1969

PCGA = project construction grant agreement

PMP = project management plans

ROW = right-of-way

Project Development

Complete NEPA process,

refinement of financial plan,

commitment of nonfederal 

funding, construction plans, ROW 

acquisition, before-after data

collection plan, FTA evaluation for 

PCGA, begin negotiations

Legend

Page 13 GAO-07-917 Public Transportation
FTA evaluated and rated 18 New Starts, Small Starts, and Very Small Starts 

projects for funding during the fiscal year 2008 evaluation cycle. Of the 14 

New Starts projects that FTA evaluated and rated, FTA recommended to 

Congress funding for 10 projects, including 2 new projects, 2 pending 

projects, and 6 “other” projects. FTA also evaluated and rated 4 Small 

Starts and Very Small Starts applications, and recommended all of these 

projects for funding. The fiscal year 2008 President’s budget requests $1.40 

billion in New Starts funding, including $100 million for the Small Starts 

program. Although SAFETEA-LU authorized $200 million each year for the 

Small Starts program, no funds have yet been allocated to the program, 

due, in part, to its newness. 

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

Fiscal Year 2008 (annual report) identified 19 New Starts projects in 

preliminary engineering and final design. FTA evaluated and rated 14 of 

these projects, rating 2 as “high,” 12 as “medium,” and none as “low.”16 Five 

additional projects were statutorily exempt from being rated because their 

sponsors requested less than $25 million in federal funding. 

FTA recommended 10 New Starts projects for funding. Specifically, FTA 

recommended 2 New Starts projects for proposed FFGAs. The total capital 

cost of these 2 projects is estimated to be $6.30 billion, with the total 

federal New Starts share expected to about one-third of this total. In 

addition, FTA recommended funding for 2 projects with pending FFGAs. 

The total capital cost of these 2 projects is estimated to be $1.13 billion, 

and the total federal New Starts share is expected to be about one-half of 

the total cost. FTA also recommended reserving $72.08 million in New 

Starts funding for 6 “other” projects. FTA selected these “other” projects 

using the decision rules that the projects have a “medium” or higher rating; 

have a “medium” or higher cost-effectiveness rating; and is expected to 

advance to final design as of June 2008. According to FTA, no other 

project in preliminary engineering or final design met these decision rules. 

Similar to last year, FTA did not specify how much would be set aside for 

the 6 “other” New Starts projects because it wanted to ensure that the 

projects were moving forward as anticipated before making specific 

funding recommendations to Congress. Reserving funds for these projects 

without specifying a particular amount for any given project will allow the 

FTA Recommended 

14 Projects for Fiscal 

Year 2008 Funding; 

SAFETEA-LU 

Changes to 

Evaluation and Rating 

Process Remain 

FTA Evaluated and Rated 

14 New Starts Projects, 

and Recommended 

Funding for 10 Projects 

 16In comparison, 20 projects were evaluated and rated in the fiscal year 2007 evaluation 

cycle, with 1 rated as “high,” 17 as “medium,” and 2 as “low.” 

Page 14 GAO-07-917 Public Transportation
administration to make “real time” funding recommendations when 

Congress is making appropriations decisions. FTA does not expect that all 

6 “other” projects will be recommended for funding in fiscal year 2008 (see 

table 1).17

Table 1: Projects Recommended for an FFGA and Other Funding, Fiscal Year 2008 

Dollars in millions 

Project name Location Total capital costs 

New Starts share of

total capital costs

Proposed FFGA 

Second Avenue Subway Phase I New York, NY $4,655.40 28%

University Link LRT Extension Seattle, WA 1,645.90 46

Total $6,301.30

Pending FFGA

West Corridor LRT Denver, CO $574.20 51%

South Corridor I-205 / Portland Mall LRT Portland, OR 557.40 60

Total $1,131.60

Other project

New Britain - Hartford Busway Hartford, CT $458.78 60%

Northstar Corridor Rail Minneapolis-Big Lake, 

MN 

307.31 49

North Corridor BRT Houston, TX 275.30 50

Southeast Corridor BRT Houston, TX 169.80 50

Norfolk LRT Norfolk, VA 232.10 55

Dulles Corridor Metrorail Project – 

Extension to Wiehle Ave. 

Northern Virginia, VA 2,065.00 44

Total $3,508.29

Legend 

BRT = bus rapid transit 

LRT = light rail transit 

Source: GAO analysis of FTA data. 

 17In its annual report, FTA stated that 3 of these “other” projects are expected to be in final 

design by spring 2007, assuming satisfactory resolution of any outstanding issues. FTA also 

stated that the remaining 3 “other” projects are in final design, but because of uncertainties 

related to their scopes, schedules, and/or budgets, FTA lacked confidence—at the time the 

administration was preparing its fiscal year 2008 budget proposal—that the projects would

maintain their “medium” rating and/or achieve the necessary cost-effectiveness rating to be

recommended for an FFGA. 

Page 15 GAO-07-917 Public Transportation
In the fall of 2006, FTA received 12 Small Starts and Very Small Starts 

requests to enter project development for the fiscal year 2008 evaluation 

cycle.

18 A majority of these Small Starts and Very Small Starts requests to 

enter project development were from project sponsors in the western and 

southern regions of the country and all but 2 were for bus rapid transit 

projects. FTA determined that only 1 Small Starts project and 3 Very Small

Starts projects were complete, ready, and eligible to be approved into 

project development. FTA subsequently proposed these projects for a 

PCGA. We found that the reasons for ineligible projects and incomplete 

applications ranged from unclear program guidance to inconsistent 

information provided by FTA. (See table 2 for more information on the 

Small Starts and Very Small Starts projects for fiscal year 2008.) 

FTA Evaluated and Rated 4 

Small Starts and Very 

Small Starts Projects, and 

Recommended Funding 

for All 4 Projects 

Table 2: Small Starts and Very Small Starts Projects, Fiscal Year 2008

Dollars in millions 

Project name City SS/VSS Cost

New Starts 

share 

Project

eligible 

Application

complete 

Pioneer Parkway BRT Springfield, OR SS $36.99 $29.59 Yes Yes 

Pacific Hwy So BRT King County, WA VSS 25.07 14.08 Yes Yes 

Troost Corridor BRT Kansas City, MO VSS 30.73 24.58 Yes Yes 

Metro Rapid System Bus Gap 

Closure Project 

Los Angeles, CA VSS 25.66 16.68 Yes Yes 

Van Nuys Corridor Rapid Bus Los Angeles, CA VSS 8.00 6.84 No Yes 

Mountlake Terrace BRT Station Seattle, WA VSS 31.72 9.92 No Yes 

Sepulveda Corridor Rapid Bus Los Angeles, CA VSS 37.00 31.60 No Yes 

Mason Transportation Corridor (BRT) Fort Collins, CO SS 68.28 54.62 Yes No 

Mountain Links BRT Flagstaff, AZ VSS 17.73 13.76 Maybe No

Bus/Gondola Station Breckenridge, CO VSS 46.70 37.36 No No 

North-South T-Way BRT Sarasota, FL SS 140.15 N/A Maybe No 

Las Colinas APT Connector Irving, TX SS N/A N/A No No 

Legend 

APT = area personal transit 

BRT = bus rapid transit 

SS = Small Starts project that does not qualify as a Very Small Starts project 

VSS = Very Small Starts project 

 18Portland, Oregon, submitted an application for a Small Starts project in early 2007. The 

application was for a $151 million streetcar project. However, the application was 

submitted after FTA’s deadline for inclusion in its fiscal year 2008 New Starts annual 

report. Therefore, we did not include this project in our review. 

Page 16 GAO-07-917 Public Transportation
Source: GAO analysis of FTA data. 

Note: The numbers included in this table are what was recommended by FTA in the New Starts

annual report but the actual total capital cost and percent of New Starts share is subject to change at 

the time FTA executes the FFGA.

FTA evaluated and rated the 4 Small Starts and Very Small Starts projects 

that were eligible and had complete applications. All 4 of these projects 

received a “medium” rating. FTA approved the 4 Small Starts and Very 

Small Starts projects for advancement into the project development phase 

on the basis of its review, evaluation, and rating of their applications. The 

total capital cost of these projects is estimated to be $118.4 million, and 

the total Small Starts, including Very Small Starts, share is expected to be

$84.9 million. FTA has also recommended that $48.2 million be allocated 

for “other” Small Starts projects that were not ready for advancement into 

project development at the time applications were due, but that may be 

ready for advancement later in fiscal year 2008. 

The Administration’s 

Fiscal Year 2008 Budget 

Proposal Requests $1.40 

Billion for the New Starts 

Program 

The administration’s fiscal year 2008 budget proposal requests that $1.40

billion be made available for the New Starts program. This amount is $166 

million less than the program’s fiscal year 2007 appropriation. Figure 4 

illustrates the planned uses of the administration’s proposed fiscal year 

2008 budget for New Starts, including the following: 

• $863.74 million would be shared among the 11 New Starts projects with 

existing FFGAs, 

• $120 million would be shared between the 2 New Starts projects with 

pending FFGAs, 

• $210 million would be shared between the 2 New Starts projects proposed 

for new FFGAs, 

• $72.08 million would be shared by as many as 6 “other” New Starts 

projects to continue their development, and 

• $100 million would be used for new Small Starts and Very Small Starts 

projects. 

Page 17 GAO-07-917 Public Transportation
Figure 4: Planned Uses of the Administration’s Proposed Fiscal Year 2008 Funding 

for the Capital Investment Grants Program

Notes: 

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

project management oversight activities. 

Federal statute requires that specified amounts of New Starts funds be set aside annually for projects

in Alaska and Hawaii; new fixed-guideway systems; and extensions to existing systems that are 

ferryboats, ferryboat terminals, or approaches to ferryboat terminals. 

FTA is authorized to provide $5 million for each fiscal year from 2006 through 2009 for the Denali 

Commission, which provides critical utilities, infrastructure, and economic support throughout Alaska,

particularly in remote communities. 

Although SAFETEA-LU authorized $200 million for the Small Starts 

program each year from fiscal years 2006 through 2009, no funding for the 

program has been allocated to date. For fiscal year 2007, the 

administration’s budget proposal requested $100 million for the Small 

Starts program. Of the $1.57 billion allocated to the New Starts program 

Pending FFGAs

$120 

62%

Source: GAO analysis of FTA data.

Existing FFGAs

$863.74 

9%

15%

5% 

7% 

1% 

Oversight activities

$13.99 

1% 

Ferry capital projects (AK or HI)

and Denali Commission

$20 

Proposed FFGAs

$210 

Other projects

$72.08

Small Starts

$100 

Dollars in millions

Page 18 GAO-07-917 Public Transportation
for fiscal year 2007, no funding was appropriated for Small Starts projects. 

The administration’s budget proposal for fiscal year 2008 also requests 

$100 million for the Small Starts program. FTA officials told us that they 

requested less than the authorized amounts for the Small Starts program 

for both fiscal years 2007 and 2008 because it has taken time for them to 

establish the program, and because they did not receive as many Small 

Starts applications as expected. 

SAFETEA-LU requires FTA to make several changes to the New Starts 

evaluation and rating process, including adding economic development as 

an evaluation criterion and changing the rating scale. FTA is in the process 

of implementing these changes. For example, table 3 describes the act’s 

changes to the evaluation and rating process and the status of their 

implementation, as of July 2007. 

FTA Is Implementing 

Several Changes to the 

New Starts Evaluation and 

Rating Process 

Table 3: Implementation of SAFETEA-LU Changes to the New Starts Evaluation and Rating Process, as of July 2007 

SAFETEA-LU provision Description Status of implementation Remaining action(s)

Revise New Starts overall 

project-rating scale 

The overall project rating is 

based on a 5-point scale of 

“high,” “medium-high,” 

“medium,” “medium-low,”and 

“low.” Projects are required to 

receive an overall rating of 

“medium” or higher to be 

recommended for funding. 

FTA used a 3-point project- rating 

scale for the fiscal years 2007 

and 2008 evaluation and rating 

cycles, but changed ratings to

“high,” “medium,” and “low.” 

FTA’s February 2007 policy 

guidance proposed implementing 

the 5-point scale starting in May 

2007. 

None. 

Identify reliability of cost 

estimate and ridership forecast 

as considerations in evaluation

process 

The Secretary of Transportation 

is required to analyze, evaluate, 

and consider the reliability of the 

forecasting methods used by 

New Starts project sponsors and 

their contractors to estimate 

costs and ridership. 

FTA’s January 2006 policy 

guidance for New Starts and 

advanced notice of proposed 

rulemaking for Small Starts 

proposed an approach for 

incorporating reliability into project 

evaluations. 

Rulemaking needed to 

establish requirement. 

Add economic development 

criterion to evaluation process

Projects will be evaluated on the 

basis of a review of their effects 

on local economic development.

FTA considers economic 

development as an unweighted

“other factor” criterion in the 

evaluation process. FTA has 

sought comments from various 

parties on the appropriate 

measures for economic 

development. 

Rulemaking needed to solicit 

comments on and finalize 

measures for economic 

development. 

Identify land use as a specific 

evaluation criterion 

Projects will be evaluated on the 

basis of a review of their public 

transportation supportive landuse policies and future patterns. 

FTA considers land use as a 

weighted criterion in the 

evaluation process. 

None. 

Source: GAO analysis of FTA data. 

Page 19 GAO-07-917 Public Transportation
Although FTA has taken steps to implement changes required by 

SAFETEA-LU, the project sponsors we interviewed frequently expressed 

concern that FTA has not yet fully incorporated economic development 

into its evaluation. Specifically, FTA currently assigns a weight of 50 

percent each to cost-effectiveness and land use to calculate a project’s 

overall rating. The other four statutorily defined criteria, including 

economic development, mobility improvements, operating efficiencies, 

and environmental benefits, are not weighted. As described in table 3, to 

reflect SAFETEA-LU’s increased emphasis on economic development, 

FTA has encouraged project sponsors to submit information that they 

believe demonstrates the impact of their proposed transit investments on 

economic development. According to FTA, this information is considered 

as an “other factor” in the evaluation process, but is not weighted. 

However, FTA officials told us that few project sponsors submit 

information on their projects’ economic development benefits for 

consideration as an “other factor.” We previously reported that FTA’s 

reliance on two evaluation criteria to calculate a project’s overall rating is

drifting away from the multiple-measure evaluation and rating process 

outlined in statute and current New Starts regulations.19 Thus, we 

recommended that FTA (1) improve the measures used to evaluate New 

Starts projects so that all of the statutorily defined criteria can be used in 

determining a project’s overall rating or (2) provide a crosswalk in the 

regulations showing clear linkages between the criteria outlined in the 

statute and the criteria and measures used in the evaluation and rating 

process in the upcoming rulemaking process. 

Many of the project sponsors and all of the industry groups we 

interviewed also stated that they believe certain types of projects are 

penalized in the evaluation and rating process because of the weights 

assigned to the different evaluation criteria. Specifically, the project 

sponsors and industry groups said that by not weighting economic 

development, the evaluation and rating process does not consider an 

important benefit of some transit projects. They also expressed concern 

that the measure FTA uses to determine cost-effectiveness does not 

adequately capture the benefits of certain types of fixed-guideway 

projects—such as streetcars—that have shorter systems and provide 

enhanced access to a dense urban core, rather than transport commuters 

 19GAO, Public Transportation: Opportunities Exist to Improve the Communication and

Transparency of Changes Made to the New Starts Program, GAO-05-674 (Washington, 

D.C.: June 28, 2005). 

Page 20 GAO-07-917 Public Transportation
from longer distances (e.g., light or heavy rail). Project sponsors and an 

industry group we interviewed further noted that FTA’s cost-effectiveness 

measure has influenced some project sponsors to change their project 

designs from more traditional fixed-guideway systems (e.g., light rail or 

streetcars) to bus rapid transit, expressly to receive a more favorable costeffectiveness rating from FTA. 

According to FTA officials, they understand the importance of economic 

development to the transit community and the concerns raised by project 

sponsors, and said they are currently working to develop an appropriate 

economic development measure. FTA is currently soliciting input from 

industry groups on how to measure economic development, studying 

possible options, and planning to describe how it will incorporate 

economic development into the project justification criteria in its 

upcoming rulemaking. FTA officials also stated that incorporating 

economic development into the evaluation process before issuing a 

regulation could potentially create significant uncertainty about the 

evaluation and rating process for project sponsors. Furthermore, they 

agreed with our previous recommendation that this issue should be 

addressed as part of their upcoming rulemaking, which they expect to be

completed in April 2008. As part of its upcoming rulemaking, FTA will also 

conduct several outreach efforts with project sponsors and industry 

groups. 

FTA officials noted that they have had difficulty developing an economic 

development measure that both accurately measures benefits and 

distinguishes competing projects. For example, FTA officials said that 

separating economic development benefits from land-use benefits—

another New Starts evaluation criterion—is difficult. In addition, these 

officials noted that many economic development benefits result from 

direct benefits (e.g., travel time savings). Therefore, including economic 

development benefits in the evaluation could lead to double-counting the 

benefits FTA already measures and uses to evaluate projects. 

Furthermore, FTA officials noted that some economic development 

impacts may represent transfers between regions, rather than a net benefit

for the nation, thereby raising questions about the usefulness of these 

Page 21 GAO-07-917 Public Transportation
benefits for a national comparison of projects.20 We have also reported on 

many of the same challenges of measuring and forecasting indirect 

benefits, such as economic development and land-use impacts.21 For 

example, we noted that certain benefits are often double-counted when 

transportation projects are evaluated. We also noted that indirect benefits, 

such as economic development, may be more correctly considered 

transfers of direct user benefits or of economic activity from one area to

another. Therefore, estimating and adding such indirect benefits to direct 

benefits could constitute double-counting and lead to overestimating a 

project’s benefits. Despite these challenges, we have previously reported 

that it is important to consider economic development and land-use 

impacts, since they often drive local transportation investment choices.22

The number of projects in the New Starts pipeline has decreased since the 

fiscal year 2001 evaluation and rating cycle, and the types of projects in the 

pipeline have changed. FTA and project sponsors attributed these changes 

to different factors, with FTA officials citing their increased scrutiny of 

applications and projects, and the project sponsors pointing to the 

complex, time-consuming, and costly nature of the New Starts process. 

FTA is considering different ideas on how to improve the New Starts 

process, some of which may address the concerns identified by project 

sponsors. 

Changes in the Size 

and Composition of 

the New Starts

Pipeline Are Likely 

Due to Different 

Factors 

The Number of Projects in 

the New Starts Pipeline 

Has Decreased, and the 

Types of and Funding for 

Projects Have Changed 

Since the fiscal year 2001 evaluation cycle, the number of projects in the 

New Starts pipeline—which includes projects that are in the preliminary 

engineering or final design phases—has decreased by more than one-half,

from 48 projects in the fiscal year 2001 evaluation cycle to 19 projects in 

the fiscal year 2008 evaluation cycle. Similarly, the number of projects FTA 

has evaluated, rated, and recommended for New Starts FFGAs has 

decreased since the fiscal year 2001 evaluation and rating cycle. 

 20Indirect benefits, such as economic development, may represent transfers of economic 

activity from one area to another. While such a transfer may represent real benefits for the

jurisdiction making the transportation investment, it is not a real economic benefit from a 

national perspective because the economic activity is simply occurring in a different

location. 

21GAO, Highway and Transit Investments: Options for Improving Information on 

Projects’ Benefits and Costs and Increasing Accountability for Results, GAO-05-172

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

22GAO-05-172. 

Page 22 GAO-07-917 Public Transportation
Specifically, as shown in table 4, the number of projects that FTA 

evaluated and rated decreased by about two-thirds, from 41 projects to 14

projects. 

Table 4: Number of Projects in the Pipeline, and Evaluated and Rated, by Fiscal 

Year 

Fiscal year 

Number of projects in the 

pipelinea

Number of projects

evaluated and ratedb

2001 48 41

2002 40 26

2003 43 25

2004 52 27

2005 37 23

2006 30 18

2007 22 18

2008 19 14

Source: GAO analysis of FTA data. 

a

Data include projects that were evaluated and rated for the fiscal year evaluation cycle as well as 

“exempt” projects. 

b

Data include projects in final design and preliminary engineering, both recommended and not 

recommended, but do not include “exempt” projects and those categorized by FTA as “not rated.” 

Although the number of projects in the New Starts pipeline has decreased, 

the amount of funding FTA has requested for the program remained 

relatively the same, while the average dollar amount per FFGA has 

increased since fiscal year 2001. Adjusted to current dollars, FTA has 

requested nearly the same funding amounts for the program during this 

time frame, having requested $1.22 billion in fiscal year 2001 and $1.37 

billion in fiscal year 2008. Twelve projects were recommended for FFGAs 

in fiscal year 2001, while only 2 were recommended for fiscal year 2008.

However, in the fiscal years between 2001 and 2008, the number of 

projects recommended for FFGAs varied from as many as 5 to as few as 2 

for any given fiscal year. Furthermore, we found that the average dollar 

amount requested for proposed FFGAs has increased since fiscal year 

2001. When adjusted to current dollars, the average dollar amount of an 

Page 23 GAO-07-917 Public Transportation
FFGA proposed in fiscal year 2001 was about $20 million, but for fiscal 

year 2008 it was $103 million (see table 5).23

Table 5: Total Dollar Amounts and Numbers of New Starts FFGAs, by Fiscal Year 

Amounts in 2007 dollars 

Fiscal year 

Total number of

proposed FFGAs

Average dollar amount requested

per proposed FFGAa

2001 12 $20,338,288

2002 5 19,052,155

2003 2 30,568,123

2004 4 63,658,035

2005 5 62,039,958

2006 4 150,450,331

2007 5 60,520,000

2008 2 103,042,198

Source: GAO analysis of FTA data. 

a

These dollar values are only for the year in which the project was proposed for an FFGA. Dollar 

values were adjusted for inflation, using the gross domestic product (chained) price index, with fiscal 

year 2007 as the reference year. Dollar values through fiscal year 2006 were calculated using 

averages of quarterly indexes from the U.S. Department of Commerce, Bureau of Economic Analysis, 

Survey of Current Business, and National Income and Product Accounts, table 1.1.4 as of January 

31, 2007. Dollar values for fiscal years 2007 and 2008 are from Congressional Budget Office 

projections, The Budget and Economic Outlook (Washington, D.C.: January 2007), 136-137. 

The composition of the pipeline—that is, the types of projects in the 

pipeline—has also changed since the fiscal year 2001 evaluation cycle. 

During fiscal years 2001 through 2007, light rail and commuter rail were 

the more prevalent modes for projects in the pipeline. In fiscal year 2008,

bus rapid transit became the most common transit mode for projects in 

the New Starts pipeline (see fig. 5). The increase in bus rapid transit 

projects is likely due to a number of factors, including foreign countries’ 

positive experiences with this type of transit system. To be eligible, a 

corridor-based bus project must (1) operate in a separate right-of-way 

dedicated for public transit use for a substantial portion of the project or 

(2) represent a substantial investment in a defined corridor. Furthermore, 

medium and smaller project sponsors may be expressing more interest in 

the New Starts program, including Small Starts, because bus rapid transit 

 23FTA officials told us that although the dollars per project have increased over time, the 

share or percentage of New Starts funding per project has decreased. We did not verify this 

information. 

Page 24 GAO-07-917 Public Transportation
may serve as a more affordable and cost-effective alternative to other 

fixed-guideway options. 

Figure 5: Types of Projects in the New Starts Pipeline, by Fiscal Year

0

2

4

6

8

10

12

14

16

18

20

2001 2002 2003 2004 2005 2006 2007 2008

Number of projects

Source: GAO.

Fiscal year

Light rail

Commuter rail

Bus rapid transit

Heavy rail

Other 

Although bus rapid transit projects are now more common than commuter 

or light rail projects, they represent a small amount of the total cost for all 

projects in the pipeline. We found that bus rapid transit accounts for about 

12 percent of the total cost of all projects in the New Starts pipeline, while

commuter rail (36 percent), heavy rail (30 percent), and light rail (22 

percent) account for greater shares—which is not surprising, given that 

bus rapid transit projects are often less expensive than rail projects. 

However, although bus rapid transit projects account for a smaller share 

of the total costs, we found that project sponsors seek higher funding 

shares for these projects. In fiscal year 2008, project sponsors sought, on 

average, New Starts funding to cover about 58 percent of the total cost of

bus rapid transit projects, whereas they sought about 49 percent for 

commuter rail projects, about 50 percent for light rail projects, and about 

38 percent for heavy rail projects. 

Page 25 GAO-07-917 Public Transportation
FTA and project sponsors identified different factors for the decrease in 

the New Starts pipeline. FTA officials cited their increased scrutiny of 

applications to help ensure that only the strongest projects enter the 

pipeline, and said they had taken steps to remove projects from the 

pipeline that were inactive, not advancing, or did not adequately address 

identified problems. According to FTA officials, these projects consume 

FTA oversight resources and congressional funding without demonstrating 

evidence of progress. FTA officials said they believed projects had been 

progressing slowly through the pipeline in recent years and, therefore, 

needed encouragement to move forward or be removed from the pipeline.

Along these lines, since fiscal year 2004, FTA has issued warnings to 

project sponsors that alert them to specific project deficiencies that must 

be corrected by a specified date for the project to advance through the 

pipeline. If the deficiency is not corrected, FTA removes the project from 

the pipeline. To date, FTA has issued warnings for 13 projects. Three 

projects have only recently received a warning and their status is to be 

determined; 3 projects have adequately addressed the deficiency identified

by FTA; 1 project was removed by FTA for failing to address the identified 

deficiency; and 6 projects were withdrawn from the pipeline by the project 

sponsors. FTA officials told us that project sponsors are generally aware 

of FTA’s efforts to better manage projects in the pipeline. 

FTA and Project Sponsors 

Attributed the Decrease in 

the New Starts Pipeline to 

Different Factors 

Although FTA has taken steps to remove inactive or stalled projects from 

the pipeline, FTA officials noted that most projects have been withdrawn 

by their project sponsors, not FTA. According to FTA data, 23 projects 

were withdrawn from the New Starts pipeline between calendar years 

2001 and 2007. Of these, 16 projects were withdrawn from the pipeline at

the request of project sponsors; 6 were removed from the pipeline in 

response to efforts initiated by FTA; and 1 was removed from the pipeline 

at congressional direction.24 Of the 16 projects that were withdrawn by 

project sponsors, the most common reasons were that the project was 

either reconfigured (the project scope or design was significantly 

changed) or reconsidered, or that the local financial commitment was not 

demonstrated. Similarly, FTA initiated the removal of 4 of 6 projects for 

lack of local financial commitments, often demonstrated by a failed 

referendum at the local level. Of the 23 projects withdrawn from the New 

Starts pipeline, 3 were expected to reenter the pipeline at a later date. 

 24The 16 projects withdrawn by their sponsors and the 6 projects withdrawn by FTA 

include the 7 projects that received a warning and were subsequently withdrawn from the

pipeline by the project sponsors or FTA. 

Page 26 GAO-07-917 Public Transportation
The project sponsors we interviewed provided other reasons for the 

decrease in the number of projects in the New Starts pipeline. The most 

common reasons cited by project sponsors were that the New Starts 

process is too complex, costly, and time-consuming: 

• Complexity and cost of the New Starts process: The majority of project 

sponsors we interviewed told us that the complexity of the requirements—

including those for financial commitment projections and travel forecasts, 

which require extensive analysis and economic modeling—creates 

disincentives to entering the New Starts pipeline. Sponsors also told us 

that the expense involved in fulfilling the application requirements, 

including the costs of hiring additional staff and private grant consultants, 

discourages some project sponsors with fewer resources from applying for 

New Starts funding. Furthermore, concerns about the cost of applying to

the New Starts program come at a time when project sponsors expect to 

receive less funding for their projects from the program. Specifically, for 

recently completed transit projects that received an FFGA, the project 

sponsors we surveyed reported that, on average, the federal government 

funded approximately 60 percent of the total project costs via the New 

Starts program. For ongoing projects, sponsors reported that they expect

to receive an average of about 50 percent of the total project costs from 

the New Starts program. 

• Time required to complete the New Starts process: More than one-half of 

the project sponsors we interviewed said that the application process is 

time-consuming or leads to project delays, although sponsors could not 

provide specifics on how long various components of the process 

contributed to a specific delay. One project sponsor told us that 

constructing a project with New Starts funding (as opposed to without 

such funding) delays the timeline for the project by as much as several 

years, which in turn leads to increased project costs since inflation and 

expenses from labor and materials increase with the delay. The lengthy 

nature of the New Starts process is due, at least in part, to the rigorous and 

systematic evaluation and rating process established by law—which, as we 

have previously noted, could serve as a model for other transportation 

programs. In addition, FTA officials noted that most project delays are 

caused by the project sponsor, not FTA. These delays are attributable to 

the sponsor’s inability to obtain local funding commitments, local 

decisions to significantly modify the project’s scope or alignment, or 

unanticipated environmental impacts. 

Other reasons for the decrease in the pipeline that were cited by the 

project sponsors we interviewed include that the project sponsors are 

finding alternative sources of funding, such as other federal funds or state, 

Page 27 GAO-07-917 Public Transportation
local, or private funding. One project sponsor remarked that sponsors try 

to avoid the New Starts process by obtaining a congressional designation,

so that they can skip the New Starts application process and construct 

their project more quickly. In addition, three other project sponsors said 

that since the New Starts process is well-established and outcomes are 

predictable, potential project sponsors do not even apply to enter the 

pipeline because they realize their projects will not fare well against the 

New Starts criteria and, thus, are unlikely to receive New Starts funding. 

Our survey found similar reasons that project sponsors provided for the 

decline in the New Starts pipeline. Among the project sponsors we 

surveyed with completed transit projects, the most common reasons given 

for not applying to the New Starts program were that the process is 

lengthy or that the sponsor wanted to move the project along faster than 

could be done in the New Starts process. About two-thirds of these project 

sponsors reported that their most recent project was eligible for New 

Starts funding, yet more than one-fourth of them did not apply to the 

program.25 Instead, these project sponsors reported using other federal 

funding and state, local, and private funding—with other federal and local

funding the most commonly used and private funding the least commonly 

used—to fund their most recently completed project. In addition, we 

found that almost two-thirds of the large project sponsors we surveyed 

applied to the New Starts program for their most recently completed 

project, while only about one-third of medium and smaller project 

sponsors applied.26 Other reasons these project sponsors cited for not 

applying to the program include sufficient funding from other sources to 

complete the project, concern about jeopardizing other projects in the 

pipeline, time and resources needed to complete application each year are 

too great, and difficulty in understanding and completing the process and

in understanding the program’s eligibility requirements. 

FTA is considering and implementing different means of improving the 

New Starts process—many of which would address the concerns 

identified by project sponsors. For example, FTA has recognized that the 

 25Of the 54 project sponsors with a completed transit project, 35 reported that their most

recently completed project was eligible for New Starts funding. Of those 35 sponsors, 10 

did not apply to the program.

26For the purposes of our survey, we defined “small project sponsors” as those with an 

annual ridership of less than 10 million trips; “medium project sponsors” as those with an 

annual ridership of between 10 and 50 million trips, inclusive; and “large project sponsors” 

as those with an annual ridership of more than 50 million trips.

Page 28 GAO-07-917 Public Transportation
process can be lengthy, and in 2006 FTA commissioned a study to 

examine, among other issues, opportunities for accelerating and 

simplifying its implementation of the New Starts program. According to 

FTA officials, one of the study’s recommendations was to use project 

development agreements to solidify New Starts project schedules and 

improve FTA’s timeline for reviews. FTA officials told us that they are

pursuing this recommendation, and have already implemented project 

schedules for three New Starts projects in the pipeline. Other key 

recommendations for FTA contained in the study include developing a 

simple “road map” that concisely identifies requirements for navigating 

through preliminary engineering and final design, more clearly defining 

entry criteria for each phase of the process, simplifying the travel 

forecasting modeling, and clarifying and consistently implementing the 

New Starts technical guidance and policies. The FTA Administrator has 

publicly stated that FTA will continue to look for ways to further improve 

the program. 

In June 2007, FTA issued in the Federal Register a number of changes to 

the New Starts and Small Starts processes, including streamlining through 

the elimination of a number of reporting requirements. For example, FTA 

will no longer require project sponsors to submit information on operating 

efficiencies and environmental benefits, nor will they be required to 

submit information for evaluation for FTA’s annual report if their project

is not likely to be ready for a funding recommendation. In addition, the 

resubmission of information on land-use patterns for the annual report 

will now be optional for project sponsors. Other changes to the processes 

include expanding the evaluation criteria to a five-tiered rating scale, and 

considering a project’s innovative contractual agreements in the 

evaluation and rating of the operating finance plan for projects. The 

guidance also states that under the evaluation of “other factors,” if a 

project is a principal element of a congestion management strategy, this 

could increase a project’s overall rating. Projects could also increase their 

overall rating by reporting economic development; therefore, FTA 

encourages project sponsors to submit such information. 

Page 29 GAO-07-917 Public Transportation
Our survey and interviews of project sponsors indicated that there will 

likely be a future demand for New Starts funding. Survey respondents told 

us that they plan to seek New Starts funding for 101 of 141 future planned 

New Starts, Small Starts, and Very Small Starts transit projects. While FTA 

has taken steps to streamline the Small Starts program as envisioned by 

SAFETEA-LU, project sponsors find the application process to be timeconsuming and too costly to complete. In addition, project sponsors we 

interviewed, especially those that have never applied for New Starts 

funding, find the Small Starts interim guidance difficult to understand and 

would like more assistance from FTA on how to complete the application 

process. 

Our survey of project sponsors indicated that there is likely to be a future

demand for New Starts funding. About 46 percent (77 of 168) of the 

project sponsors we surveyed reported that they had a total of 141 planned 

transit projects, which we defined as projects currently undergoing an

alternatives analysis or other corridor-based planning study. According to

the project sponsors, they will likely seek New Starts funding for almost 

three-fourths (72 percent, or 101) of these 141 planned New Starts, Small 

Starts, and Very Small Starts projects. More specifically, they will likely 

seek New Starts funding for 57 of the planned New Starts projects, 30 of 

the planned Small Starts projects, and 14 of the planned Very Small Starts 

projects (see fig. 6).27 Although the project sponsors we surveyed indicated

that they were considering a range of alternative project types in their 

planning, the most commonly cited alternatives were bus rapid transit and 

light rail. 

Future Demand for 

New Starts Program 

Expected; Project 

Sponsors Seek Small 

Starts Program 

Improvements

Project Sponsors Indicated 

That Future Demand for 

New Starts Funding Is 

Likely 

 27For the remaining 40 planned transit projects, respondents said either that they were not 

planning to apply for New Starts funding, or that they did not know whether they planned 

to apply. 

Page 30 GAO-07-917 Public Transportation
Figure 6: Project Sponsors’ Expected Use of New Starts Funding for Planned New 

Starts, Small Starts, and Very Small Starts Projects 

Note: “Other” refers to the project sponsors we surveyed that selected “None of the above” in 

response to the type of federal funding, if any, they are likely to request for their planned project(s). 

All of the Small Starts and Very Small Starts project sponsors we 

interviewed viewed the new Small Starts program favorably. These project 

sponsors told us that they appreciated the emphasis FTA has placed on

smaller transit projects through its new programs and the steps FTA has 

taken to streamline the application process for the programs. The project 

sponsors also told us that the Small Starts program, including the Very 

Small Starts eligibility category, address a critical and unmet funding need, 

and that they believe their projects will be more competitive under these 

programs because they are vying for funding with projects and agencies of

similar size. FTA officials told us that they have been responsive in 

providing assistance on the program when contacted. 

Our survey results also indicated that, through its Small Starts program, 

FTA is attracting more project sponsors than before, including those that 

have not previously applied for the New Starts program and also those 

that would not otherwise be applying for New Starts funds. For example, 

of the 30 project sponsors that intend to seek New Starts funding for their 

Don’t know

57

Source: GAO.

Small Starts

New Starts

27

30

13

14 

Other

Very Small Starts

Page 31 GAO-07-917 Public Transportation
planned Small Starts and Very Small Starts projects,28 13 have not 

previously applied for New Starts funding.29 Project sponsors also 

indicated that the Small Starts program, including the eligibility category 

for Very Small Starts projects, has influenced how they plan for their 

ongoing projects, which are projects that have completed the alternatives 

analysis phase and have moved forward into the later stages of 

development, such as preliminary engineering or final design. Of the 

ongoing Small Starts and Very Small Starts projects for which respondents 

indicated they would be requesting New Starts funding, project sponsors 

definitively reported that they would have sought New Starts funding for 

only about one-quarter of those ongoing projects if the Small Starts 

program, including the eligibility category for Very Small Starts projects, 

had not been established. 

In implementing the Small Starts program, FTA has taken steps to 

streamline the application and evaluation and rating processes for smallerscale transit projects, as envisioned by SAFETEA-LU. According to our 

analysis of the numbers and types of requirements for the New Starts and 

Small Starts application processes, the Small Starts process has fewer 

requirements. For example, in the categories of travel forecasting, project 

justification, and local financial commitment, the number of requirements 

was reduced. FTA also established a simplified financial evaluation 

process for Small Starts, which reduced the reporting burden for qualified

projects. In addition, FTA allows simplified methods for travel forecasts 

that predict transportation benefits, and it reduced the number of 

requirements for the Small Starts application process. For example, the 

Small Starts application process is about one-quarter fewer requirements 

than those for the New Starts program. FTA also established the Very 

Small Starts process, which has even fewer application requirements than 

the Small Starts program. This process expedites the reporting, evaluation, 

and advancement of simple and inexpensive projects. FTA’s steps have 

greatly reduced the amount of information to be submitted for each of the 

specific requirements (see table 6). 

Project Sponsors Would 

Like FTA to Further 

Streamline the Small Starts 

Program 

 28Planned projects are in the earliest stages of development (i.e., alternatives analysis or a 

similar corridor-based planning study). The 30 project sponsors that responded to our

survey intend to seek New Starts funding for their planned Small Starts or Very Small Starts

projects. However, 2 of those sponsors did not answer whether they had previously applied 

for New Starts funding. 

29These projects may or may not currently be in FTA’s pipeline of New Starts or Small 

Starts projects. 

Page 32 GAO-07-917 Public Transportation
Table 6: New Starts, Small Starts, and Very Small Starts Application Requirements

Number of reporting requirements, by

project type

Category of reporting requirements New Starts Small Starts

Very Small 

Starts

Project background and maps 3 3 4

Travel forecasts 7 7a0

Costs (operations, maintenance, and 

capital) 7 5 5

Project justification criteria 12 6a1a

Local financial commitment 4 3a3

Certification of technical methods and 

planning assumptions 1 1 0

Make-the-case document 1 1 1

Total 35 26 14

Source: GAO analysis of the New Starts, Small Starts, and Very Small Starts application requirements.

a

Data indicate that in this category, whether the number of requirements has remained the same or 

decreased, FTA has greatly reduced the amount of information to be submitted for each specific 

requirement. For example, in the travel forecast category, both the New Starts and Small Starts 

programs have seven application requirements, but the Small Starts program requires substantially 

less information for each requirement. 

Despite these efforts, many of the project sponsors we interviewed find 

the Small Starts application process time-consuming and too costly to 

complete, and would like to see FTA further streamline the process. 

Frequently, project sponsors said that the current Small Starts application 

process takes as long and costs as much to complete as the New Starts 

application process, even though the planned projects cost less. For 

example, a project sponsor that applied to the Small Starts program told 

us that FTA asks applicants to submit templates used in the New Starts 

application process that call for information not relevant for a Small Starts 

project, such as travel forecasts beyond the opening year, which are not 

required for the Small Starts program. The project sponsor suggested that 

FTA develop a separate set of templates for the Small Starts program that 

would ask only for Small Starts-related information. FTA officials told us 

that in these cases, they would not expect project sponsors to provide the 

additional information that is not required. Another project sponsor we 

interviewed told us that although FTA tried to streamline the process by 

requiring ridership projections only for the opening year of Small Starts 

projects, the environmental impact statement still mandates the 

development of multiyear ridership projections. Such extensive ridership 

projections take a considerable amount of work, staff time, and funding to 

Page 33 GAO-07-917 Public Transportation
produce. FTA officials explained to us that the level of ridership 

projections required is dependent on the nature of the project. Several

other project sponsors that applied to the Small Starts program, including

sponsors that used the Very Small Starts process, expressed additional 

concerns about having to provide duplicate information, such as project 

finance and capital cost data that can be found in other required 

worksheets. FTA officials do not believe that such duplicate information is 

burdensome for project sponsors to submit. Nonetheless, smaller-sized 

entities that lack New Starts experience, in-house expertise, and resources 

may find the process burdensome. 

In reviewing the Small Starts application process requirements, we also 

found that the application is not always tailored for Small Starts applicants 

and, in several instances, requests duplicate information. FTA officials 

acknowledged that the Small Starts application process could be further 

streamlined and said that they are working to decrease the burden by, for 

example, reducing land-use reporting requirements, simplifying the rating

process, and developing specific Small Starts templates. However, FTA 

officials noted that some requirements are statutorily defined or reflect 

industry-established planning principles. For example, federal statute 

requires that projects, even Small Starts projects, emerge from an 

alternatives analysis that considers various options to address the 

transportation problem at hand. Therefore, only certain aspects of the 

process can be streamlined. 

The project sponsors we interviewed, especially those that have never 

applied for New Starts funding, would like more assistance from FTA in 

completing the application process because some find the interim 

guidance difficult to understand. Before the Small Starts and Very Small 

Starts application deadline, FTA provided initial outreach to applicants. 

Despite this outreach, 8 of the 12 applications were incomplete or sought

funding for ineligible projects. In some cases, the project sponsors that 

submitted these applications had no past experience with the New Starts 

process, limiting their familiarity with the information required for the 

application. To help address this issue, FTA officials told us that, in one

instance, they provided a Very Small Starts project sponsor with a copy of 

a submitted application from another project sponsor (with New Starts 

program experience) to use as a guide. The Very Small Starts project 

sponsor found the application to be helpful in preparing its own 

application. FTA officials told us that they plan to host an informal 

meeting of potential Small Starts project sponsors later this calendar year. 

In addition, some project sponsors did not understand what constitutes an 

Project Sponsors Seek 

Additional Application 

Assistance and Consistent 

Information from FTA on 

Small Starts 

Page 34 GAO-07-917 Public Transportation
eligible project. For example, one project sponsor we interviewed 

submitted an application for the construction of a new station. However, 

FTA officials told us that the construction of a station did not meet the 

definition of a corridor-based project, as required. Another project sponsor 

we interviewed told us that it believed FTA deemed its two Small Starts 

and Very Small Starts projects ineligible because service was already being 

provided on the proposed route (and, therefore, the proposed service 

would not be new). In response, FTA officials told us that these projects 

were in fact ineligible because they already had incremental 

developments, including some of the elements FTA requires for Small 

Starts and Very Small Starts projects, such as traffic signal priority or 

preemption and branding of the proposed service. Yet, these project 

sponsors were unaware that the incorporation of some of these elements 

into their existing service rendered their project ineligible.30 We found that 

although FTA’s Small Starts guidance outlines the elements required for a 

project to receive funding, it does not explicitly state that projects that 

have already begun to incrementally incorporate these elements are 

ineligible. When we discussed this concern with FTA officials, they told us 

that they might consider asking project sponsors to demonstrate the costeffectiveness of the preexisting elements to allow for such projects to be

eligible for Small Starts funding. 

The project sponsors we interviewed said they need more consistent, 

reliable information from FTA. We found that on several occasions, FTA 

headquarters and regional offices provided project sponsors with 

inconsistent information, which contributed to the sponsors’ submitting 

applications for ineligible projects and submitting incomplete applications. 

For example, two project sponsors said they thought their projects were 

eligible after talking with FTA regional officials. However, after submitting 

their applications, these project sponsors learned from FTA headquarters 

officials that their projects were ineligible. Furthermore, one project 

sponsor stated that officials from a regional FTA office said there was no 

need to submit a separate application for the Small Starts program, since 

the sponsor had previously applied to the New Starts program. Rather, 

 30According to FTA’s guidance, Small Starts projects must (1) meet the definition of a fixed 

guideway for at least 50 percent of the project length in the peak period, (2) be a fixedguideway project, or (3) be a corridor-based bus project with the following minimum 

elements: substantial transit stations; traffic signal priority or preemption, to the extent, if 

any, that there are traffic signals on the corridor; low-floor vehicles or level boarding; 

branding of the proposed service; and 10-minute peak and 15-minute off-peak running 

times (i.e., headways) or better while operating at least 14 hours per weekday. 

Page 35 GAO-07-917 Public Transportation
FTA regional officials said the project sponsor needed to submit only a 

few additional pieces of information. However, after the project sponsor 

sent this information, along with a letter to FTA requesting that the 

application be transferred from the New Starts program to the Small Starts 

program, FTA headquarters officials responded that the application was 

incomplete. The study of the New Starts process that FTA recently 

commissioned found similar inconsistencies in the information provided 

by officials in its regional offices and headquarters. Therefore, the study 

recommended that FTA develop internal standard operating procedures 

for New Starts staff that formalize the duties and responsibilities for each 

position. In addition, the study recommended implementing Web-based

technology to standardize the communication and enforcement of policies 

across the program, and having FTA establish a formal policy for 

responding to every project sponsor’s correspondence with a formal 

response or written notification. FTA officials told us that they understand

the need to ensure consistent information, and that they are already 

working on developing standard operating procedures for New Starts 

staff, as recommended in the study. 

The recent decrease in the New Starts pipeline does not appear to be a 

reflection of diminishing interest in the program. In fact, our survey 

showed that there will likely be substantial demand for New Starts funding 

in the future if most potential project sponsors follow through on their 

plans for new transit projects. Rather, the decrease is likely due to a 

combination of factors, including FTA’s increased scrutiny of projects, 

project sponsors’ perceptions of the process as lengthy and too complex,

and project sponsors’ uncertainty given the recent changes made to the 

New Starts program. As FTA moves forward with the rulemaking process 

for New Starts and Small Starts, it will have to balance both the need to

make the programs accessible to a range of project sponsors—both large 

and small agencies—and the need to maintain the rigor of the evaluation 

and rating process. 

Although project sponsors expressed substantial interest in both the New 

Starts and the Small Starts programs, they also identified a number of 

ways to improve the programs. In particular, project sponsors raised 

specific concerns about the Small Starts program. Because the Small 

Starts program is in its first few years of implementation, it is not 

surprising that it may experience growing pains. Some of the project 

sponsors may find their concerns about the program addressed as they 

become more familiar and comfortable with it and as a number of 

implementation details are finalized through the upcoming rulemaking 

Conclusions 

Page 36 GAO-07-917 Public Transportation
process. However, we believe that the relatively low number of Small 

Starts applications received to date and the number of project sponsors 

submitting ineligible applications due to unclear guidance suggest that 

additional FTA action is warranted, including further streamlining the 

Small Starts program, providing additional information about the program 

through training and a working group, and clarifying eligibility guidance. 

Although FTA has taken some steps to further streamline the Small Starts 

program, continued refinement is needed to ensure a simplified and 

expedited evaluation process. FTA’s upcoming rulemaking, including the 

associated outreach efforts, will provide an opportunity for FTA to 

continue to streamline the Small Starts program, provide additional 

training, and clarify guidance. 

To improve the Small Starts program, we are recommending that the

Secretary of Transportation direct the FTA Administrator to take the 

following three actions:

Recommendations for 

Executive Action 

• To increase awareness and information sharing about the Small Starts, 

including Very Small Starts, application process, FTA should conduct 

training (in-person, Web-based, or both) for potential applicants and 

facilitate the development of a working group or community of practice. 

• To ensure that project sponsors better understand the types of corridor 

bus projects that are eligible for Small Starts funding, FTA should clarify in

its Small Starts program guidance that bus rapid transit projects cannot 

already include any of the required elements for eligibility, or if they do, 

must demonstrate the cost-effectiveness of the preexisting elements. 

• To ensure that the Small Starts program provides a streamlined 

application process as envisioned by SAFETEA-LU, FTA should continue 

to refine this process as outlined in the Small Starts program guidance. 

Examples of refinements include collapsing the project finance or cost 

worksheets to minimize the duplication of data to be submitted and 

providing specific guidance on how, when applicable, Small Starts 

applicants can conduct a simplified alternatives analysis. 

Page 37 GAO-07-917 Public Transportation
We provided DOT, including FTA, with a draft copy of this report for 

review and comment. DOT generally agreed with the report’s findings and

conclusions, and agreed to consider our recommendations. DOT also 

provided technical clarifications, which we incorporated as appropriate. 

We are sending copies of this report to the congressional committees with 

responsibilities for transit issues; the Secretary of Transportation; the 

Administrator, Federal Transit Administration; and the Director, Office of

Management and Budget. We also will make copies available to others 

upon request. In addition, this report will be available at no charge on 

GAO’s Web site at http://www.gao.gov. 

If you or your staff have any questions on matters discussed in this report, 

please contact me on (202) 512-2834 or at siggerudk@gao.gov. Contact 

points for our Offices of Congressional Relations and Public Affairs may 

be found on the last page of this report. Individuals making key 

contributions to this report are listed in appendix II. 

Katherine Siggerud 

Director, Physical Infrastructure Issues 

Agency Comments 

Page 38 GAO-07-917 Public Transportation
Appendix I: Scope and Methodology Appendix I: Scope and Methodology 

To address our objectives, we reviewed the Federal Transit 

Administration’s (FTA) guidance on the New Starts and Small Starts 

programs; the Advanced Notice of Proposed Rule Making for Small Starts; 

and the provisions of the Safe, Accountable, Flexible, Efficient 

Transportation Equity Act: A Legacy for Users and prior law that address 

the New Starts program. We reviewed this legislation to identify changes 

that have occurred in the New Starts program and to gather information 

on FTA’s new Small Starts program, which we used, in part, to analyze the 

quantitative differences in application requirements between this program 

and the New Starts program. Furthermore, we reviewed the FTA’s Annual 

Reports on New Starts for fiscal years 2001 through 2008 to determine 

trends in the New Starts pipeline (those projects in preliminary 

engineering and final design) for each year, including the number of 

projects evaluated, rated, and recommended for funding; the modes of 

projects in the pipeline; and the amount of New Starts funding requested 

for projects, and the total costs of proposed projects. 

We also interviewed FTA officials and industry associations to gain their 

insights on past, current, and future aspects of the programs. We 

interviewed FTA officials who work extensively with the New Starts and 

Small Starts programs to gain a better understanding of the programs. In 

addition, we interviewed three industry associations that represent project 

sponsors that participate closely in these programs: the American Public 

Transportation Association, the New Starts Working Group, and 

Reconnecting America. Furthermore, we attended an American Public 

Transportation Association legislative workshop to learn about the New 

Starts and Small Starts programs, including New Starts project planning 

and evaluation process, and Small Starts interim guidance and rulemaking. 

We also interviewed 15 project sponsors, including all 10 sponsors that 

applied for the Small Starts program (including Very Small Starts 

applicants) for the fiscal year 2008 evaluation cycle. We interviewed the 

project sponsors to gather information on their past experiences with the 

New Starts and Small Starts programs, and their potential future use of 

these programs. The 10 project sponsors we interviewed that applied for 

the fiscal year 2008 Small Starts program (including Very Small Starts 

applicants) included the City of Breckenridge Public Works Department 

(Breckenridge, Colorado); Dallas County Utility and Reclamation District 

(Irving, Texas); Fort Collins Transportation Department (Fort Collins, 

Colorado); Kansas City Area Transportation Authority (Kansas City, 

Missouri); King County Metro (King County, Washington); Lane Transit 

District (Springfield, Oregon); Los Angeles County Metropolitan Transit 

Authority (Los Angeles, California); Northern Arizona Intergovernmental

Page 39 GAO-07-917 Public Transportation
Appendix I: Scope and Methodology 

Public Transportation Authority (Flagstaff, Arizona); Sarasota County 

Area Transit (Sarasota County, Florida); and Sound Transit (Seattle, 

Washington). In addition, we interviewed 5 other project sponsors that 

varied in their levels of experience with the New Starts program, size, and 

regional location. These 5 sponsors were the Metropolitan Transit 

Authority of Harris County (Houston, Texas); New Jersey Transit 

Corporation (Newark, New Jersey); Orange County Transit Authority 

(Orange County, California); St. Louis Regional Transit (St. Louis, 

Missouri); and TriMet (Portland, Oregon). 

To further address our objectives, we used a Web-based questionnaire to 

survey all of the project sponsors that are located in an urbanized area 

with a population of over 200,000 and have an annual ridership of over 1 

million. These project sponsors may or may not have previously applied to

the New Starts or Small Starts programs, but because of their size and 

ridership, they would be more likely to plan the types of transit projects 

that would potentially qualify for New Starts funding. Project sponsors 

were defined typically as transit agencies, but they may also have included 

city transportation offices and metropolitan planning organizations, 

among other entities. 

The questionnaire to project sponsors asked questions that allowed for a 

combination of open-ended and closed-ended responses. The 

questionnaire included questions about project sponsors’ (1) current 

transit situation, (2) most recently completed transit projects, (3) current 

ongoing transit projects, and (4) future planned transit projects. For each 

question, we asked the project sponsors about the types of transit project

they sponsored, how they funded or intended to fund transit projects in 

the future, and their experiences with and perceptions of the various 

programs. 

The questionnaire was designed by a GAO survey specialist in conjunction

with other GAO staff knowledgeable about the grant program. We 

pretested the questionnaire with 5 project sponsors that had varying levels

of experience in working with the New Starts program. Three project 

sponsors had previously applied to either the New Starts program or the 

Small Starts program, while 1 project sponsor had not applied to either 

program. In addition, the 5 project sponsors represented both larger and 

smaller project sponsors included in our list of the 215 largest transit 

agencies. The 5 project sponsors were the Fort Collins Transportation 

Department (Fort Collins, Colorado); Maryland Transit Administration 

(Baltimore, Maryland); Rockford Mass Transit District (Rockford, Illinois); 

TriMet (Portland, Oregon); and Washington Metropolitan Area Transit 

Page 40 GAO-07-917 Public Transportation
Appendix I: Scope and Methodology 

Authority (Washington, D.C.). Furthermore, we asked two industry groups 

(the American Public Transportation Association and the New Starts 

Working Group) and FTA to review the project sponsor questionnaire and 

provide comments. During the pretests and reviews of the questionnaire, 

we asked the project sponsors and industry groups whether the questions 

were understandable and if the information was feasible to collect. We 

refined each of the questions as appropriate in response to the feedback 

we received.

To conduct the questionnaire, we posted self-administered electronic 

questionnaires to the World Wide Web and sent e-mail notifications to 

project sponsor contacts provided to us by FTA in early February 2007. We 

found after our first e-mail that some addresses were no longer valid, so 

we contacted each agency by telephone to find the appropriate contact to

send the e-mail notification. We also responded to inquiries from project 

sponsors. Many project sponsor contacts believed they were not the right

person to answer the questions. In these instances, we resent the e-mail 

notification to the correct contact at the project sponsor. Our goal was to 

find the staff member at each project sponsor who was the most 

knowledgeable about the New Starts program and the Small Starts 

program. 

After determining the correct contact, we e-mailed each potential 

respondent a unique username and password to ensure that the project 

sponsor would have access to the questionnaire. We asked the project 

sponsor contact to complete the questionnaire within 2 weeks. To 

encourage respondents to complete the questionnaire, we sent an e-mail 

message to prompt each nonrespondent every 2 weeks after the initial 

e-mail message for approximately 6 weeks. After 6 weeks, we called all 

nonrespondents at least once to encourage their participation in the 

questionnaire and to increase our response rate. We closed the 

questionnaire on May 11, 2007. In total, we surveyed 215 project sponsors 

and received responses from 168 of them, for a response rate of 78 

percent. To view our questionnaire and the aggregated project sponsor 

responses, go to www.gao.gov/cgi-bin/getrpt?GAO-07-927SP. 

Because the questionnaire was not a sample survey, it has no sampling 

errors. However, the practical difficulties of conducting any survey may 

introduce errors, commonly referred to as “nonsampling” errors. For 

example, difficulties in how a particular question is interpreted, in the 

sources of information available to the respondents, or in how the data are 

entered into a database or were analyzed can introduce unwanted 

variability into the questionnaire results. We took steps in developing the 

Page 41 GAO-07-917 Public Transportation
Appendix I: Scope and Methodology 

questionnaire, collecting the data, and analyzing the data to minimize these 

nonsampling errors. For example, as we have previously noted, our survey 

specialists designed the questionnaire in collaboration with GAO subject 

matter experts, and we pretested the draft questionnaire with the 

appropriate officials to ensure that the questions were relevant, clearly

stated, and easy to comprehend. After the data were analyzed, a second, 

independent analyst checked all computer programs. Since this was a 

Web-based questionnaire, the respondents entered their answers directly 

into the electronic questionnaire, eliminating the need to have the data

keyed into a database, thereby removing an additional potential source of 

error. 

We performed our work from November 2006 through July 2007 in 

accordance with generally accepted government auditing standards. 

Page 42 GAO-07-917 Public Transportation
Appendix II: 

A

GAO Contact and Staff 

cknowledgments 

Page 43 GAO-07-917 

Appendix II: GAO Contact and Staff 

Acknowledgments 

Katherine Siggerud, (202) 512-2834, siggerudk@gao.gov

In addition to the individual named above, other key contributors to this 

report were Nikki Clowers, Assistant Director; Elizabeth Eisenstadt; Carol 

Henn; Bert Japikse; Amanda Miller; SaraAnn Moessbauer; Nitin Rao; Tina 

Won Sherman; Bethany Claus Widick; and Elizabeth Wood.

GAO Contact 

Staff 

Acknowledgments 

Public Transportation
Related GAO Products 

Page 44 GAO-07-917 

Related GAO Products 

Public Transportation: Preliminary Analysis of Changes to and Trends 

in FTA’s New Starts and Small Starts Programs. GAO-07-812T. 

Washington, D.C.: May 10, 2007. 

Public Transportation: New Starts Program Is in a Period of Transition.

GAO-06-819. Washington, D.C.: August 30, 2006. 

Public Transportation: Preliminary Information on FTA’s 

Implementation of SAFETEA-LU Changes. GAO-06-910T. Washington,

D.C.: June 27, 2006. 

Public Transportation: Opportunities Exist to Improve the 

Communication and Transparency of Changes Made to the New Starts 

Program. GAO-05-674. Washington, D.C.: June 28, 2005. 

Mass Transit: FTA Needs to Better Define and Assess Impact of Certain 

Policies on New Starts Program. GAO-04-748. Washington, D.C.: June 25, 

2004. 

Mass Transit: FTA Needs to Provide Clear Information and Additional 

Guidance on the New Starts Ratings Process. GAO-03-701. Washington,

D.C.: June 23, 2003. 

Mass Transit: Status of New Starts Program and Potential for Bus Rapid 

Transit Projects. GAO-02-840T. Washington, D.C.: June 20, 2002. 

Mass Transit: FTA’s New Starts Commitments for Fiscal Year 2003. 

GAO-02-603. Washington, D.C.: April 30, 2002. 

Mass Transit: FTA Could Relieve New Starts Program Funding 

Constraints. GAO-01-987. Washington, D.C.: August 15, 2001.

Mass Transit: Implementation of FTA’s New Starts Evaluation Process 

and FY 2001 Funding Proposals. GAO/RCED-00-149. Washington, D.C.: 

April 28, 2000. 

Mass Transit: Status of New Starts Transit Projects With Full Funding 

Grant Agreements. GAO/RCED-99-240. Washington, D.C.: August 19, 1999. 

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

Starts Evaluation Process. GAO/RCED-99-113. Washington, D.C.: April 26,

1999. 

(542105) Public Transportation
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