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38–168 PDF 2007

THE FEDERAL TRANSIT ADMINISTRATION’S PROPOSED RULE ON THE

NEW STARTS AND SMALL STARTS

PROGRAMS

(110–72)

HEARING

BEFORE THE

SUBCOMMITTEE ON 

HIGHWAYS AND TRANSIT

OF THE

COMMITTEE ON 

TRANSPORTATION AND 

INFRASTRUCTURE 

HOUSE OF REPRESENTATIVES

ONE HUNDRED TENTH CONGRESS

FIRST SESSION

SEPTEMBER 26, 2007

Printed for the use of the 

Committee on Transportation and Infrastructure

(

COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE 

JAMES L. OBERSTAR, Minnesota, Chairman 

NICK J. RAHALL, II, West Virginia, Vice 

Chair 

PETER A. DEFAZIO, Oregon 

JERRY F. COSTELLO, Illinois 

ELEANOR HOLMES NORTON, District of 

Columbia 

JERROLD NADLER, New York 

CORRINE BROWN, Florida 

BOB FILNER, California 

EDDIE BERNICE JOHNSON, Texas 

GENE TAYLOR, Mississippi 

ELIJAH E. CUMMINGS, Maryland 

ELLEN O. TAUSCHER, California 

LEONARD L. BOSWELL, Iowa 

TIM HOLDEN, Pennsylvania 

BRIAN BAIRD, Washington 

RICK LARSEN, Washington 

MICHAEL E. CAPUANO, Massachusetts 

JULIA CARSON, Indiana 

TIMOTHY H. BISHOP, New York 

MICHAEL H. MICHAUD, Maine 

BRIAN HIGGINS, New York 

RUSS CARNAHAN, Missouri 

JOHN T. SALAZAR, Colorado 

GRACE F. NAPOLITANO, California 

DANIEL LIPINSKI, Illinois 

DORIS O. MATSUI, California 

NICK LAMPSON, Texas 

ZACHARY T. SPACE, Ohio 

MAZIE K. HIRONO, Hawaii 

BRUCE L. BRALEY, Iowa 

JASON ALTMIRE, Pennsylvania 

TIMOTHY J. WALZ, Minnesota 

HEATH SHULER, North Carolina 

MICHAEL A. ACURI, New York 

HARRY E. MITCHELL, Arizona 

CHRISTOPHER P. CARNEY, Pennsylvania 

JOHN J. HALL, New York 

STEVE KAGEN, Wisconsin 

STEVE COHEN, Tennessee 

JERRY MCNERNEY, California 

LAURA A. RICHARDSON, California 

JOHN L. MICA, Florida 

DON YOUNG, Alaska 

THOMAS E. PETRI, Wisconsin 

HOWARD COBLE, North Carolina 

JOHN J. DUNCAN, JR., Tennessee 

WAYNE T. GILCHREST, Maryland 

VERNON J. EHLERS, Michigan 

STEVEN C. LATOURETTE, Ohio 

RICHARD H. BAKER, Louisiana 

FRANK A. LOBIONDO, New Jersey 

JERRY MORAN, Kansas 

GARY G. MILLER, California 

ROBIN HAYES, North Carolina 

HENRY E. BROWN, JR., South Carolina 

TIMOTHY V. JOHNSON, Illinois 

TODD RUSSELL PLATTS, Pennsylvania 

SAM GRAVES, Missouri 

BILL SHUSTER, Pennsylvania 

JOHN BOOZMAN, Arkansas 

SHELLEY MOORE CAPITO, West Virginia 

JIM GERLACH, Pennsylvania 

MARIO DIAZ-BALART, Florida 

CHARLES W. DENT, Pennsylvania 

TED POE, Texas 

DAVID G. REICHERT, Washington 

CONNIE MACK, Florida 

JOHN R. ‘RANDY’ KUHL, JR., New York 

LYNN A WESTMORELAND, Georgia 

CHARLES W. BOUSTANY, JR., Louisiana 

JEAN SCHMIDT, Ohio 

CANDICE S. MILLER, Michigan 

THELMA D. DRAKE, Virginia 

MARY FALLIN, Oklahoma 

VERN BUCHANAN, Florida 

(II)

SUBCOMMITTEE ON HIGHWAYS, TRANSIT AND PIPELINES 

PETER A. DEFAZIO, Oregon, Chairman 

NICK J. RAHALL II, West Virginia 

JERROLD NADLER, New York 

ELLEN O. TAUSCHER, California 

TIM HOLDEN, Pennsylvania 

MICHAEL E. CAPUANO, Massachusetts 

JULIA CARSON, Indiana 

TIMOTHY H. BISHOP, New York 

MICHAEL H. MICHAUD, Maine 

BRIAN HIGGINS, New York 

GRACE F. NAPOLITANO, California 

MAZIE K. HIRONO, Hawaii 

JASON ALTMIRE, Pennsylvania 

TIMOTHY J. WALZ, Minnesota 

HEATH SHULER, North Carolina 

MICHAEL A ARCURI, New York 

CHRISTOPHER P. CARNEY, Pennsylvania 

JERRY MCNERNEY, California 

BOB FILNER, California 

ELIJAH E. CUMMINGS, Maryland 

BRIAN BAIRD, Washington 

DANIEL LIPINSKI, Illinois 

DORIS O. MATSUI, California 

STEVE COHEN, Tennessee 

ZACHARY T. SPACE, Ohio 

BRUCE L. BRALEY, Iowa, Vice Chair 

HARRY E. MITCHELL, Arizona 

LAURA A. RICHARDSON, California 

JAMES L. OBERSTAR, Minnesota 

(Ex Officio) 

JOHN J. DUNCAN, JR., Tennessee 

DON YOUNG, Alaska 

THOMAS E. PETRI, Wisconsin 

HOWARD COBLE, North Carolina 

RICHARD H. BAKER, Louisiana 

GARY G. MILLER, California 

ROBIN HAYES, North Carolina 

HENRY E. BROWN, JR., South Carolina 

TIMOTHY V. JOHNSON, Illinois 

TODD RUSSELL PLATTS, Pennsylvania 

JOHN BOOZMAN, Arkansas 

SHELLEY MOORE CAPITO, West Virginia 

JIM GERLACH, Pennsylvania 

MARIO DIAZ-BALART, Florida 

CHARLES W. DENT, Pennsylvania 

TED POE, Texas 

DAVID G. REICHERT, Washington 

CHARLES W. BOUSTANY, JR., Louisiana 

JEAN SCHMIDT, Ohio 

CANDICE S. MILLER, Michigan 

THELMA D. DRAKE, Virginia 

MARY FALLIN, Oklahoma 

VERN BUCHANAN, Florida 

JOHN L. MICA, Florida 

(Ex Officio) 

(III)

(V)

CONTENTS Page

Summary of Subject Matter .................................................................................... vi

TESTIMONY 

Huffer, Mark E., Kansas City Area Transit Authority, General Manager, 

Kansas City, MO .................................................................................................. 29

Poticha, Shelley, Reconnecting America, President and CEO, Oakland, CA ..... 29

Simpson, Hon. James S., Federal Transit Administration, Administrator, 

Washington, D.C. ................................................................................................. 4

Townes, Michael, Hampton Roads Transit, Executive Director, Hampton, VA . 29

Zimmerman, Christopher, Arlington County Board, Board Member, Arlington, 

VA .......................................................................................................................... 29

PREPARED STATEMENTS SUBMITTED BY MEMBERS OF CONGRESS 

Mitchell, Hon. Harry E., of Arizona ....................................................................... 42

PREPARED STATEMENTS SUBMITTED BY WITNESSES 

Huffer, Mark E. ....................................................................................................... 46

Poticha, Shelley ........................................................................................................ 51

Simpson, Hon. James S. .......................................................................................... 60

Townes, Michael S. .................................................................................................. 78

Zimmerman, Christopher ........................................................................................ 83

SUBMISSIONS FOR THE RECORD 

Simpson, Hon. James S., Federal Transit Administration, Administrator, 

Washington, D.C.:

Responses to questions from Rep. DeFazio ........................................................ 67

Responses to questions from Rep. Napolitano ................................................... 75

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38168.006
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38168.007
(1)

HEARING ON THE FEDERAL TRANSIT ADMINISTRATION’S PROPOSED RULE ON THE NEW 

STARTS AND SMALL STARTS PROGRAMS 

Wednesday, September 26, 2007

HOUSE OF REPRESENTATIVES

COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE, 

SUBCOMMITTEE ON HIGHWAYS AND TRANSIT, 

Washington, DC. 

The Subcommittee met, pursuant to call, at 10:00 a.m., in Room 

2167, Rayburn House Office Building, the Honorable Peter A. 

DeFazio [Chairman of the Subcommittee] presiding. 

Mr. DEFAZIO. The Subcommittee will come to order. I want to 

thank Members and the witnesses for being here. 

On May 10th we held a hearing on New Starts and Small Starts, 

and at that time the FTA had not yet issued its proposed rule for 

these programs. We had, I thought at the time, a pretty frank exchange of views and the Committee made clear and underlined 

what we thought was the legislative intent previously. Unfortunately, since that time we now have the NPRM on New and Small 

Starts, and I don’t think that, as currently written, it reflects the 

concerns that were raised in that hearing. I don’t believe it implements the statutory intent, and it has caused tremendous concern 

among transit stakeholders around the Country in terms of the 

long-term implications, should it be implemented as currently written. I am hopeful that we will see some major changes. 

We understand we are in the comment period. The FTA has 

scheduled some listening sessions, and hopefully not only the FTA 

will be listening, but those others in the Administration who have 

been involved in writing this rule will be listening and will be attentive to concerns expressed and perhaps conveyed to them by the 

FTA. 

I will get into the details of my particular concerns after we have 

heard from the Administrator. I appreciate his being here today. 

But I really do feel that this is potentially a failed attempt at rulemaking that, as I said earlier, somehow there are new provisions 

that were not authorized by Congress that seem to reflect the agenda of other parts of the Department of Transportation and the 

Bush Administration, and yet those parts which should reflect the 

clear statutory instructions from Congress are still wanting. 

So I look forward to discussing this rule with the Administrator 

and other witnesses. 

I do have a markup on a very, very critical issue to my district—

it is also a national issue—in another Committee, so at some point 

2

I will have to leave, but we will try and move things along as 

quickly as we can. 

With that I turn to the Ranking Member, Mr. Duncan. 

Mr. DUNCAN. Thank you, Mr. Chairman. You have pretty well 

adequately stated the situation under the Federal Transit Administration’s New Starts Program. Local transit agencies partner with 

the FTA to develop and construct subway, light rail, commuter rail, 

streetcar, ferry, and bus rapid transit projects to try to solve specific local transportation problems in their communities. New 

Starts projects can be brand new starter lines or extensions to existing transit systems. The size, cost, and complexity of these 

projects varies widely. 

SAFETEA-LU authorized a new Small Starts program within 

New Starts for projects that are less than $250 million in total cost 

and less than $75 million in New Starts funding. The program is 

designed for simpler, smaller projects and the evaluation and rating process is also supposed to be simpler, and we hope will allow 

for faster development and construction. 

The FTA project evaluation and rating process is established in 

law by this Committee. SAFETEA-LU made a number of changes 

to the New Starts program and today’s hearing will focus on the 

Notice of Proposed Rulemaking or, as you have stated, NPRM, that 

the FTA has developed to implement those changes. Once this proposed rule is finalized—and it always amazes me how long it takes 

to finalize a rule such as this—it will govern New Starts and Small 

Starts policy for years to come. It will be at least two years after 

the next authorization bill is passed before changes in that law are 

implemented in a new final rule, so the final rule that results from 

the current NPRM before us will be in place at least through 2011, 

and perhaps longer. 

I have been impressed and do appreciate the responsiveness and 

courtesy which the FTA has shown my staff and my constituents 

in Knoxville in working through a transit center land purchase 

issue there, but I do wish there was more flexibility in the rules 

that the agency is implementing in this case. It seems like there 

is very little room for responding to unique circumstances. 

This same concern could also be raised regarding the proposed 

rule on New Starts and Small Starts we are examining today. The 

FTA runs the risk of locking in certain policies too timely in the 

rule and not being able to react to new information, including better forecasting tools, ways to capture and reflect economic development around transit stations and along the corridor, and other benefits. 

The agency needs to carefully consider all the comments it receives in the upcoming comment period and build in enough flexibility in the New Starts and Small Starts evaluation process to 

help move forward good transit projects. It would be a shame and 

certainly would not reflect the intent of SAFETEA-LU if this new 

rule has the effect of discouraging communities from considering 

transit solutions at all. 

I thank you, Mr. Chairman, for holding this hearing and I yield 

back the balance of my time. 

Mr. DEFAZIO. I thank the gentleman. 

3

I have been notified that Ms. Matsui would like to make a brief 

opening statement. I would recognize her at this time. 

Ms. MATSUI. Thank you, Mr. Chairman. Thank you for calling 

this important hearing. For many of us, our transit systems are the 

backbone of our districts. In many cases, our transit systems are 

also the blueprint for future growth and economic opportunity in 

the communities we represent. In my district, and especially within 

the City of Sacramento, we consider most of our future growth and 

economic development on our transportation infrastructure, and 

specifically our light rail system. Therefore, it is important that our 

New Starts and Small Starts programs are responsive to the needs 

and demands of our growing communities. 

My main concern is why isn’t the FTA following the guidelines 

and criteria that Congress laid out in SAFETEA-LU. Specifically, 

I am concerned that the FTA is too narrowly focused on cost-effectiveness of projects, looking only at the time savings and not the 

full range of the project benefits. While this is important and a criteria that should be followed, other criteria such as land use decisions and economic development opportunities must play a greater 

role in the FTA decision-making process. 

If our light rail systems are truly going to meet the needs of our 

communities, they must be built with the anticipation of future regional growth and economic development. Transit should be used 

as a tool to encourage our communities to grow smartly and, in 

some cases, safely. Sacramento is the most at-risk city in the Country for catastrophic flooding. In addition, the Sacramento region is 

one of the fastest growing regions in the Country. We have to make 

our land use decisions wisely. 

In short, the principles of transit-oriented development must be 

a strong consideration in the New Starts approval process. Over 

the last decade, public transportation’s growth rate outpaced population growth and the growth rate of vehicle miles traveling our 

Nation’s highways. It is my hope that, as we move forward with 

full implementation of SAFETEA-LU programs, that the full intent 

of the legislation that was drafted here in the Committee be followed. 

By this I mean that land use and economic development criteria 

included among the six evaluation criteria be weighed on equal 

footing with other factors, such as cost-effectiveness. Transit-oriented land use and development are demonstrated factors that 

truly do make projects more cost-effective in the long run. We need 

to capture the dramatic increase of transit ridership across the 

Country and marry it with the steady population growth many of 

our communities and regions are experiencing. We need a Federal 

partner that responds better to these trends. 

Combining SAFETEA-LU’s revised criteria in the New Starts 

FTA decision-making process is an important step in ensuring that 

the projects Congress authorizes and ultimately funds may see 

evolving demand of our regions. Ultimately, fully integrating transit-oriented development into the New Start decision-making process will be the most cost-effective measure we can take to ensure 

that the investment made by the American taxpayers leverage additional private sector investments and create more sustainable, 

livable communities. 

4

I am looking forward to working on these issues during this Congress. Thank you, Mr. Chairman, for calling this hearing. I yield 

back. 

Mr. DEFAZIO. I thank the gentlelady. 

Any other Members have opening statements? 

[No response.] 

Mr. DEFAZIO. If not, then we will proceed to the honorable witness, Mr. Simpson. 

TESTIMONY OF THE HONORABLE JAMES S. SIMPSON, FEDERAL TRANSIT ADMINISTRATION, ADMINISTRATOR, WASHINGTON, DC. 

Mr. SIMPSON. Good morning, Chairman DeFazio, Ranking Member Duncan, and Members of this Subcommittee. Thank you for the 

opportunity to testify today on the recent NPRM on FTA’s New 

Starts and Small Starts programs. This proposed rule is intended 

to continue and strengthen our successful management of this important program. Our goal for New Starts remains to deliver the 

best projects on time, within budget, and that realize the benefits 

projected. At the same time, we want to streamline this process so 

that decisions are made more quickly and projects are delivered 

sooner. 

As I testified in May, we believe FTA’s management of the New 

Starts program fosters highly successful Federal local partnerships 

that benefit millions of Americans across the Country on a daily 

basis. We believe that this NPRM will continue this record of success. As you know, FTA issued the NPRM on New Starts and 

Small Starts on August 3rd, 2007. This was the culmination of a 

significant effort to obtain input from key stakeholders, which we 

are continuing. 

In January 2006, we published a series of questions on New 

Starts and an Advance Notice to Proposed Rulemaking on Small 

Starts. FTA then provided an opportunity for public involvement by 

holding three listening sessions. We received over 70 written comments on the New Starts questions and over 90 written comments 

on the Small Starts ANPRM. The NPRM summarizes and responds 

to these comments. Continuing our outreach, we are conducting 

five outreach meetings. At these sessions, FTA staff will provide 

further explanation of our NPRM and related proposed evaluation 

measures, and invite public comment to the docket, which closes 

this November 1st. 

Once the docket closes, we plan on closely examining the comments we have received. Given the stakeholder interest on this 

topic, we expect that it will take some time to carefully consider 

and prepare a final rule. We expect that the rule will be issued 

some time in 2008. 

To implement the Small Starts program, the NPRM adds eligibility for non-fixed guideway projects, as in SAFETEA-LU, and defines the kinds of investments needed to qualify. Small Start 

project justification includes only cost-effectiveness and two measures of project effectiveness, that is, land use and economic development benefits and mobility. Project justification may be made 

based on simplified travel demand forecasts based on year of opening, rather than a complex 20-year forecast. Local financial comVerDate 0ct 09 2002 16:38 Feb 11, 2008 Jkt 000000 PO 00000 Frm 00016 Fmt 6633 Sfmt 6633 P:\DOCS\38168 HTRANS1 PsN: JASON
5

mitment is assessed based on a plan that demonstrates the capacity to build and operate the project during the first year of operation. 

The NPRM proposes that certain simple, low-risk projects, which 

by their very nature have sufficient benefits to rate well without 

further analyses, can qualify as Very Small Starts and be subject 

to a highly simplified project evaluation and rating process. A 

project will be required to contain certain features and have a total 

project cost of less than $50 million. 

The NPRM includes consideration of all the statutory New Starts 

project justification criteria. The NPRM reorganizes the justification criteria into cost-effectiveness and several measures of effectiveness, namely, land use and economic development benefits, mobility improvements, and environmental benefits, and clarifies that 

operating efficiencies are covered by cost-effectiveness. 

The NPRM expands the evaluation of economic development in 

a new combined measure of land use and economic development 

benefits. We continue to believe that it is extremely difficult to distinguish economic development benefits from land use benefits. 

However, the NPRM provides an opportunity for input on how we 

might do so and how we might implement improved measures of 

project merit that would include the land use and economic development benefits more directly. 

The NPRM includes evaluation of the congestion reduction potential of the proposed investment in the assessment of mobility benefits. Further, it proposes to consider the relationship of the project 

to road pricing strategies as another factor. 

Finally, the NPRM asks for inputs on methods by which FTA 

could include the currently unmeasured highway system user benefits in calculating the cost-effectiveness of the proposed project. 

The NPRM proposes to make permanent our current policy of 

recommending for funding only those projects that rate at least medium on cost-effectiveness. First, this is the only measure that compares a project’s benefits to its costs. Second, the measure of effectiveness we use, user benefits, is an objective and quantifiable metric. Third, other benefits such as improved accessibility and mobility, the propensity for increase in property values, and the likelihood that highway users will switch to transit, reducing demand 

for highway travel, are directly related to user benefits. Finally, a 

project with a high rating on cost-effectiveness almost always has 

high ratings on other factors such as mobility improvements and 

environmental benefits. 

Chairman DeFazio, Ranking Member Duncan and Members of 

this Subcommittee, FTA is committed to the New Starts and Small 

Starts programs. We believe that the NPRM we have issued provides a good basis on which to make continued improvements to 

the management of this important program. We remain committed 

to streamlining project delivery, while providing strong project 

management oversight to bring good projects in on time and within 

budget. We look forward to working with Congress on these and 

other issues facing our Nation’s public transportation systems. 

I want to thank you for the opportunity to be here today, and I 

am happy to respond to your questions. 

Mr. DEFAZIO. Thank you, Mr. Administrator. 

6

Ranking Member Mica had another commitment, came in late, 

and has an opening statement. 

Mr. Mica. 

Mr. MICA. Thank you. Thank you for yielding, too, and also for 

holding this hearing, Mr. DeFazio and Mr. Duncan. I think this is 

very important. Since we haven’t really addressed New Starts with 

the Administration, I wanted to weigh in a little bit on a couple 

of my concerns and also from a policy standpoint. 

One of the things that I think is essential, we are all trying to 

find ways to deal with congestion and get people out of traffic and 

into mass transit and other environmentally positive modes of 

transport. One of the frustrations I have—and I am pleased to see 

you here this morning, Mr. Simpson—is just the sheer amount of 

time it takes to get into the queue, so to speak, with the New 

Starts program. And I think part of the problem I have identified 

is sometimes Congress, and I would ask this question: Have we set 

too many requirements? 

I don’t have a question, but one of the things I would like you 

to do to respond to me and also to the Committee would be to provide us with any of your specific recommendations on how could 

speed this process up. I think we are going to hear from Norfolk 

and I will ask the question about their light rail, and I think from 

the entry to P&E it is eight years, I was told. 

I have been involved, as you know, with a commuter rail on an 

existing rail right-of-way. We first proposed this in 1989. Of course, 

communities and partners have to make a decision, and they did 

that, but I know we have been involved in this for at least three 

years, answering some questions that are sort of as plain as the 

nose on somebody’s face. We have turned the consulting requirements or the requirements to do New Starts into a cottage industry 

that is very costly and time consuming. 

So I want to know how we can speed up the process. Speeding 

it up can also save us time and money. 

The other thing, too, is I can’t tell you, having been involved in 

these not just in my district with commuter rail, but around the 

Country, the players change. The local players change and the politics, and some of the politics, of course, evolve around these questions and they get pretty testy. So the longer that takes, the more 

players we deal with and the political challenges become even 

greater. 

So I compliment you on what you are doing. You have to play 

by the rules that we in Congress set, but anything you can recommend or anything you can come up with that can condense that 

period of time to get these New Starts moving. 

Then, looking at exceptions for projects like commuter rail on existing rail lines, this isn’t exactly rocket science. For example, 

through my communities, I have Amtrak already with a franchise. 

They already make these commuter stops. They could probably increase their traffic without all of these studies and requirements, 

but folks are a little bit reluctant to give Amtrak any more responsibility based on their performance and some of the constraints 

that they have to operate under. 

So those are just my comments this morning. I look forward to 

working with you. I know Mr. DeFazio and Mr. Duncan are also 

7

interest in seeing how we can help communities, States, and localities that move these new projects forward. 

Thank you, and I yield back. 

Mr. DEFAZIO. Thank you. I thank the Ranking Member for those 

comments. 

We will now proceed to questions for the Administrator. 

At issue in the earlier hearing, in May, and I believe still today, 

is that I feel you have not delivered on the statutory direction, I 

believe, from Congress regarding economic development and land 

use. They have been lumped into one criteria, and I have a couple 

problems with it. One is that it is lumped into a criteria which 

scores 20 percent, which, given the statutory direction, I believe 

does not adequately address the direction from Congress to act in 

these areas and to emphasize projects that would provide benefits 

in those areas. 

Secondly, as I understand the way—I mean, we did have testimony later, after you appeared in May, from several experts who 

had models and said there is no big deal or problem in predicting 

or forecasting economic benefits and quantifying them; that the 

work has been done, but somehow the FTA can’t find that work 

and implement it. It seems that what you are attempting to do is 

look at the impacts of a limited facility on the regional economy, 

as opposed to just looking at what the local transit agencies would 

look at, which is the economic development based on the corridor 

and the station area economic development. 

I think that is part of the problem why FTA can’t qualify; they 

are saying, well, we want to look at the impact of this line serving 

this segment, this neighborhood, and what the impact would be on 

the regional economy kind of gets lost. And we are going to have 

testimony a little later representing a county in Virginia about how 

they don’t have any trouble quantifying exactly what is going to 

happen when they do the streetcar line in terms of the more intense development that is going to occur and the economic benefits 

that are going to flow from that. 

So do you think this this part of the problem, Mr. Administrator, 

why you can’t get to economic development, that you are off chasing the regional benefit, when I believe the models that have been 

developed, and would be more practical since these are relatively 

small projects, to measure the benefits on the corridor and the stations? 

Mr. SIMPSON. Let me answer that two ways. First, let me tell you 

what FTA is doing since the last hearing in terms of economic development. Then I can give you my thoughts generally on the 

measurement of economic development. 

First, we have had a two-phased project, one started over a year 

ago, and I mentioned it at my last hearing, where we did a study, 

and the effort included an initial study to develop a methodology 

to forecast changes in economic development activity that result 

from transit capital investment projects. The FTA developed and 

tested two potential approaches. One was a regional economic 

model to forecast changes in jobs and income, and, two, to develop 

a method to forecast station area development that would result 

from transit investments, which I think is what you are referring 

to, Mr. Chairman. 

8

When we looked at those, we found that the first one, the regional economic modeling approach, was rejected due to the high 

cost and complexity of implementing these models, as well as concern about the erratic results observed in FTA’s test cases. I said 

it in my last hearing, that cost-effectiveness gives everybody a lot 

of grief. These models that we looked at would be just as challenging. 

Mr. DEFAZIO. Right. So why don’t we just discard the regional 

approach and focus on the second which you mentioned? 

Mr. SIMPSON. I’m going to get to that. 

Mr. DEFAZIO. All right. 

Mr. SIMPSON. The station area forecasting method was also 

somewhat unsatisfactory in that the impact of the transit investment on development patterns was not significant in FTA’s test 

cases. 

Now, we didn’t stop there. There is more. We have a phase two 

study that seeks to make additional progress in developing a method to evaluate the economic development impacts of capital transit 

investments. The first thing we are doing, which I mentioned to 

you previously, is we are convening a panel of top experts on economic development impacts which are well known to the industry 

and are leaders in the field. They are going to review FTA’s results 

to date and try to come up with a program for us. They are going 

to also assist us in consulting and developing a program that can 

show us which methods, if we can achieve them, are likely to succeed. The panel is also going to develop a methodology and research program based on panel recommendations, and so forth and 

so on. 

But the bottom line is that, to date, we have not been able to find 

anything that we can use on a cross-cutting basis to measure economic development. And just as a sidebar, I have been reading 

Alan Greenspan’s book on the age of turbulence and he talks about 

economic forecasting, and he basically says how complex the world 

really is, and when you try to measure something, it is just not 

that easy. And I think that, if you will allow me to steal a page 

from his book, it is pretty much the same case here. 

But what we have found consistently throughout the transit program at FTA is that when we measure cost-effectiveness, which I 

know gives a lot of folks a lot of grief, there is a direct correlation 

between the cost-effectiveness measure and economic development 

and mobility and all the other factors. They are inextricably linked 

and we just can’t uncouple them. That is why, when we now have 

decided to put land use and economic development together, we are 

trying to do a couple things: we are trying to show transparency 

and, as you said at your last hearing, we have this mysterious 

black box that we go back to the shop and try to churn out these 

cost-justifiable projects. We are trying to be transparent and to let 

everybody know clearly what we are thinking and how we are 

thinking, and we are making our best attempt at that. 

With respect to economic development and land use, we believe 

that you can’t have economic development unless you have land 

use, good land use patterns and policies. So it is a no-start if you 

don’t have that in place. So if we rate a project with really effective 

land use and then give another measure of economic development, 

9

you could be double-counting, number one. Number two, even if 

you do have really good land use, it is not enough to make the case 

that you are going to have that economic development; there are 

other externalities that are so great, including—we have had a runup in real estate over the last 17 years. I don’t care where you travel around the city, every place that I have traveled has seen economic development and the redevelopment of cities and 

warehousing districts that have become a great mixed use development, and people seem to be moving back to the city. But there are 

other externalities like interest rates, like jobs, and all those other 

things that are really hard to try to put into a formula and put into 

our so-called black box and churn out a metric that is cross-cutting 

throughout the whole Country and that is meaningful. 

The second thing with economic forecasting is we have got our 

transportation model, as I spoke about, and some of this economic 

forecasting is almost a second level of economic forecasting. So I 

think that, in a certain way, it explains what our predicament is 

here. 

Mr. DEFAZIO. Right. Well, if we can come back to earth for a 

minute. 

Mr. SIMPSON. Okay. 

Mr. DEFAZIO. I think you can look at projects that have been 

completed and, yes, you do have land use, which is a theoretical 

underpinning, but land use potential is only realized in certain instances; there is a lot of potential that isn’t realized. So I wouldn’t 

say just having that and then counting the actual economic benefits and/or more intense development that resulted from the construction of the transit project are the same thing at all. 

I mean, land use provides the potential, but the potential often 

is not realized until there is a project. And if you just look at the 

nodes that have developed just right over here in Virginia and 

around the D.C. area, the intense development has taken place and 

you can measure within a certain distance of each of the transit 

stations the values that have occurred. You can do so, similarly, in 

Portland, Oregon, where they have put a streetcar. You can see 

where, along that line, they have the same zoning on one side of 

the river and the other, but the more intense development has been 

realized along the streetcar line because that became a magnet for 

the development. 

So I have got to disagree, and I think that we just gave direction 

that doesn’t require consulting with Alan Greenspan or these other 

exotic metrics, but just the reality of will economic development follow this project and will there be value created. I think that is a 

fairly simple thing, I believe, to quantify. Having studied economics, I know it is not a science, so let’s discard the scientific stuff 

and go to observational reality and direction from Congress, which 

is we want economic development and we don’t want it to be part 

of a criteria which is only 20 percent and which is totally trumped 

by the black box of cost-effectiveness. 

And then going to cost-effectiveness, part of that goes to another 

concern, which is trips not taken. Again, we don’t seem to be putting any value on avoiding automobile use and/or commuting. I just 

had the Chairman out to ride a tram in Portland, and you were on 

that same tram. It has now been operational. They say they have 

10

had a million riders in less than a year on the tram, and what they 

are finding is at the base of that tram, which is also served by a 

streetcar line, a lot of people who work at Oregon Health Sciences 

University are relocating there. 

So they are either abandoning their cars or only using their cars 

infrequently. But there wouldn’t be any credit for that, it is a trip 

not taken. They are living on a transit line, they are living on a 

tram. You are not involving the tram. But the point is we are missing a lot of the benefits here. 

And then we also wanted to have environmental criteria, which 

go to trips not taken, congestion, lack of pollution, all those things, 

and now you have brought in this new criteria. So this is going to 

be a two-part question. One, why can’t we measure trips not taken 

and why isn’t that a benefit, because I think it is an avoided cost? 

Secondly, how is it that we would penalize a transit agency 

which, in most jurisdictions, has no control, none whatsoever, over 

policy relating to roads, bridges, and highways, if their local jurisdiction, which they don’t control, doesn’t impose tolling and congestion pricing over here, then you are going to penalize the transit 

project which is proposed over here to mitigate congestion with 

trips not taken? I mean, you are putting the transit agency in a 

bit of a difficult position here. 

Mr. SIMPSON. Mr. Chairman, we are in agreement with you that 

we should measure the trip not taken. We asked the question in 

the NPRM, and just to try to stay on earth, the problem that we 

have experienced with the trip not taken, it is sort of like the second order of magnitude or it is the forecast on the forecast. In other 

words, we are trying to forecast a certain development and a certain economic development, so that is a forecast, so we have got 

this one forecast. 

Now, off that forecast, we are going to try to forecast again behavior patterns, travel patterns, where people won’t need to use 

their automobiles. So it is the second order of magnitude in a forecast, so the——

Mr. DEFAZIO. Maybe we ought to just count the number of people 

that use the transit. 

Mr. SIMPSON. Well, we should. 

Mr. DEFAZIO. Right. 

Mr. SIMPSON. We do. I think we do. But this trip not taken is 

a very difficult——

Mr. DEFAZIO. And distribute a survey to them and say before you 

moved here, how did you get to work. 

Mr. SIMPSON. Right. You know, I understand the trip not taken, 

having lived in an urban environment, so I understand it. 

Mr. DEFAZIO. Right. 

Mr. SIMPSON. But let me just say again that we are asking that 

question. We do believe that it should be counted. And I know that 

there are one or two models out there that are counting the trip 

not taken, or proposing to count the trip not taken. Once again, 

when we put it into a national program, we have to make sure that 

we have a product that is not usable in one county and not used 

in the rest of the Country. 

Mr. DEFAZIO. Okay, but then how about my second part of the 

question? Transit agencies often do not control other modes of 

11

transportation and/or the policies that relate to them. So why 

should a transit agency be penalized in applying if their local jurisdiction has not adopted congestion pricing? 

Mr. SIMPSON. The proposal is not to penalize anybody. 

Mr. DEFAZIO. Well, I understood the first proposal was just to 

give them extra points. As I understand the NPRM, you could get 

demerit points for not having that, in addition to getting extra 

points. 

Mr. SIMPSON. Not to my knowledge, but could you hold on one 

second? 

Mr. DEFAZIO. Yes. 

Mr. SIMPSON. It is only a matter of boosting, Mr. Chairman. It 

would only help, it wouldn’t hinder. And it also——

Mr. DEFAZIO. So you are going to filter, but you are going to filter—I mean, it seems like pretty broad language. The first proposal 

was we are going to take something that wasn’t statutorily authorized by Congress——

Mr. SIMPSON. Right. 

Mr. DEFAZIO.—that is an obsession of this Administration, particularly a few ideologues from right-wing think tanks who have 

positions of power, that relate to theories of market and congestion 

pricing, and we are going to use it anywhere and everywhere we 

can. So now we have added it on to transit. We had this discussion 

last time, so I am not going to totally revisit that in terms of 

whether or not you are discouraging transit at this point with this. 

So you are just saying this so-called filter is essentially the same 

thing you proposed before, which is if an agency, which you don’t 

control, in your vicinity adopts congestion pricing, you will get 

extra points on your transit project even though you had nothing 

to do with it. 

Mr. SIMPSON. That is correct. But most planning is not——

[Laughter.] 

Mr. SIMPSON. Well, wait a minute, now, Mr. Chairman. Most 

planning is not done in a vacuum. Typically, you have got the 

whole MPO and the whole planning process. So we are saying if 

an area were to adopt a congestion pricing strategy that would help 

transit, because now you are getting more vehicles off the road and 

you have more people riding transit, we would look at things like, 

in the mobility factor, fewer vehicle miles traveled——

Mr. DEFAZIO. But when we are talking about New Starts and 

Small Starts, we are not talking about—many projects are not deep 

into suburban areas. 

Mr. SIMPSON. Right. 

Mr. DEFAZIO. So when you include that—I mean, for the inner 

city folks, I guess we would have to be talking about cordon pricing 

and saying if you want to use your car today, it is going to cost 

you $15 or $20. We are going to be like London. Of course, they 

have slightly different land use patterns in Europe. Again, the 

transit agency doesn’t control that, and it is beyond me why that 

should be a factor. 

I can see, in some limited instances, when you are dealing with 

light rail versus, say, streetcar or true Small Starts, something 

that is an extensive system which serves suburban areas, that you 

might get some extra points with the idea that you are going to 

12

somehow drive people onto that and they are going to utilize it 

more. I believe if you do it right and you make it convenient, they 

will use it, and I don’t believe that we need to penalize people to 

make them do it, and the Chairman of the full Committee shares 

my concern about this. 

Mr. SIMPSON. Mr. Chairman, I don’t want to take up the Committee’s valuable time to discuss this, but from everything that I 

know and speaking to the folks at FTA, we know of no area where 

anybody would be penalized as a result of not implementing a congestion strategy——

Mr. DEFAZIO. Right. But again, the point is that transit agencies 

don’t control these other policies. Transit agencies we want to be 

run efficiently, we want them to bring in projects on budget or 

under budget, we want them to run efficiently, and we want them 

to serve the general public. None of that, again, externalities that 

might or might not drive customers toward them, that are beyond 

their control, I don’t believe, in most instances, should be scored. 

Mr. SIMPSON. This is an NPRM and the point is well taken. But 

if I could just continue for the record for one second. 

Mr. DEFAZIO. Sure. I am well over my time. 

Mr. SIMPSON. With respect to congestion, as you know, and we 

have said it before and it is mentioned throughout the statute, the 

Department believes, first of all, that it is one DOT, and we are 

not looking at highway versus transit. As in the MPO planning 

process, we are trying to look at transportation solutions for a corridor, and it could be a mixture of transit and highway projects. 

You know, since SAFETEA-LU was written, which was probably 

five or six years ago, we have got a national crisis that is on the 

front page every day on congestion, and the Department is trying 

to take a proactive stance to try to solve the problem that perhaps 

wasn’t thought about when SAFETEA-LU was written. 

Mr. DEFAZIO. Well, I beg to differ. I think it was a major consideration when SAFETEA-LU was written. This Committee attempted to have about another $70 billion or $80 billion to invest 

over the term of the bill, which the White House fought tooth and 

nail, and in the end we got a bill that wasn’t adequate in terms 

of investment, and now they are trying to make up for that by saying, well, we will just use market forces, and I have just got to disagree with this cockamamie theory. 

Thank you. I am going to turn now to the Ranking Member. 

Mr. DUNCAN. Well, thank you, Mr. Chairman. 

Mr. Administrator, you know, the problem that I see is this. I 

have great respect for Mr. Greenspan and I agree with most of 

what he says on things, and I understand your quote that he said 

the world is a lot more complicated than people realize. On the 

other hand, a lot of people feel that the government, and particularly the Federal Government, makes things a lot more complicated 

than they really need to be. 

So, in SAFETEA-LU we had these laws trying to come up with 

some sort of environmental streamlining to speed up some of these 

projects because people on both sides of the aisle agreed that all 

of these projects were taking far too long. Where there is really a 

desire to move fast, we can do so. We showed that on the bridge 

13

out in Minneapolis. I mean, we passed a $250 million bill within 

just a few days of that happening. 

We always hear, and it gets sort of old to me to say that we are 

in a global marketplace now or we have to compete globally, and 

yet we see all these other countries that are so dynamic economically moving really fast on major projects, major highway projects, 

major aviation projects. I chaired the Aviation Subcommittee for 

six years and I will never forget the main runway in Atlanta. It 

took 14 years from conception to completion. It only took 99 days 

of actual construction, and it was primarily due to all the environmental rules and regulations and red tape. Certainly, we don’t 

want to do to the environment what they are doing in some of 

these places like China and other places, but we have to do better. 

We have got to have a better balance in there because we have got 

to speed up these projects. A few months ago we had testimony in 

here about a highway project they have been working on in California since, I think, 1990, 17 years, and it was only 12 miles. 

So what I am getting at through all this is what do you think 

your proposed rule will do to contribute to faster decision-making 

and project development, particularly in regard to the New Starts, 

the bigger programs? 

Mr. SIMPSON. Your question really gets to the question or statement, rather, that Congressman Mica made earlier, so maybe I can 

address it in that context. I mean, the environmental is one piece 

of it, but with a lot of these projects—I know it varies on the complexity. We talk about the length to bring a project from the planning cycle to the revenue date or the date that a project opens—

there are a whole bunch of reasons for them and they don’t all 

wind up at the doorstep of the Federal Government. 

We find that most of the projects—and I think you asked that 

question last time, Congressman, local commitment, rather than 

cost-effectiveness, is the reason why many projects fail and don’t 

proceed through fruition, and that holds true for the delay in 

projects. We find that in many times, as Congressman Mica was 

so eloquent in explaining it, there are changes in political parties, 

there are changes in transportation officials, and what was once a 

priority may not be a priority or other things happen, and you 

thought you had local commitment and now you no longer have 

commitment. So that is one reason why. 

The other thing is transportation planning. Sometimes, when we 

plan these projects—and we have a project very close to Washington, D.C. that is like that—that the scope gets changed and people think about, midstream, well, maybe we are not going to have 

an aerial alignment, maybe we should do a tunnel, and that is perfectly within the local jurisdiction. That also slows up projects. 

Our NEPA process, we are trying to do the best that we can with 

respect to NEPA and with respect to the processes that go on in 

FTA. We have commissioned Deloitte and we have implemented 

many of the changes, and I won’t take the Committee’s time to tell 

you them now, but I would be more than happy to send them to 

you for the record. Then we have also improved the product at FTA 

over the years. You know, there was a time, maybe 10 or 12 years 

ago, where not our forecasting, but the grant recipients’ forecasts 

on ridership were woefully inadequate and low, and their costs 

14

were a lot lower than what the actual costs would be. Now, you 

know what the rationale is for that: we need to get projects funded, 

so let’s keep the ridership numbers as optimistic as we can and the 

costs as low as possible. 

So FTA, with the help of Congress, clamped down on that and 

we are moving forward with a Contractor Performance Assessment 

Report. We started our own risk analysis to try—we do a lot, but 

basically what I am saying is we are trying to keep projects on 

time and on budget because we would rather be here talking about 

this than why the project blew the estimate by 50 percent. And we 

are trying to streamline the process as much as we can without 

jeopardizing the integrity of the program. It is a multifaceted approach and the project time line did go from 3.7 years to 4.9 years, 

where it is at now,—I guess it has been over the last 10 years—

but then again we are handling like $22 billion worth of projects 

within 99.5 percent of construction costs, which is unheard of. We 

don’t have that anywhere, and I think it is a testament to the risk 

program. So we are working what we can, it is just that there are 

so many partners involved—between the local governments, the 

Federal Government, the funding partners—that it is not as easy 

as that when you build these major capital infrastructure projects. 

And with respect to the rest of the world, I only know that we 

have rules and regulations that protect everybody, and I know 

other countries sometimes don’t have the same environmental 

guidelines or they don’t need to get consensus from the community. 

We have all that public involvement. 

Mr. DUNCAN. Well, I have certainly seen and read about what 

you are saying, you know, one mayor will start a project and be 

real enthusiastic about it, and the next mayor is not quite so enthusiastic or whatever. But I also have heard through so many 

Subcommittee hearings on several different Subcommittees in this 

Committee, I have heard local officials, I have heard academic experts, I have heard private business, you know, the contractors and 

so forth, say that all these projects that we deal with in this Committee—highways, water projects, aviation projects, the whole kit 

and caboodle—that, on average, these things take about three 

times as long and tossed about three times as much as they should. 

If we really had the desire to speed some of these things up, if we 

all joined together and made that our main——

What do you think is the most time-consuming process for New 

Starts projects sponsors in fulfilling the evaluation requirements? 

Mr. SIMPSON. Well, it depends on the project. I mean, a lot of it 

is we have got some projects where they haven’t done all the environmental protocols correctly or their forecasting is not—you know, 

we have seen projects before and we will have projects come in 

where the forecasting doesn’t look right, where you will see forecasting on the date when the project is scheduled to be completed 

and 10 years later you have seen—this is just an example—or 100 

percent increase in ridership, things that are out of the norm. So 

we see less of that today, but those are the kinds of things that we 

have to put the paperwork back to the grant receiver and say, you 

know, this really doesn’t look right, you need to look at your travel 

models and you need to look at this and you need to look at that. 

15

So it is hard to just say any one thing, it is a whole host of things, 

and it is a cumbersome process. 

Mr. DUNCAN. Well, we have other Members here. I don’t want to 

take up too much time, but let me just ask one last question. At 

our May hearing that the Chairman mentioned, the GAO testified 

that there is less than half the number of New Starts projects in 

the pipeline in fiscal year 2008 than there was in 2001. Is that 

from State and Federal funding? What is the situation? 

Mr. SIMPSON. No. I think it was we had a lower bar. In other 

words, sort of like if you just decided—I like to use the SAT as an 

example for the New Starts program, with the SAT score being 

cost-effectiveness. It is almost like if we throw away the SAT, let 

everybody come in to preliminary engineering, let’s bring everybody 

in, which was happening for a long while because of political pressures and other and lower standards. So we found out, with our 

limited assets of full-time equivalents, that we had our staff at 

FTA working on a multitude of projects, probably half of which 

aren’t going to make it past PE. 

So I think you brought this up last time, so I do have some extra 

data. From 1999 to 2005, which is what you are talking about, we 

found that 56 percent of the projects are out of the process because 

of a lack of local commitment. So there is a lack of local commitment, which seems to trump everything else, where projects fall 

out, number one. Number two, we have certain standards now, and 

if you would like to, I can articulate them. Certain things have to 

happen before we allow a project into preliminary engineering, because once we allow the project in preliminary engineering, that is 

when the resources of the Federal Government or local government, they start spending money and putting a lot of resources into 

a project. We want to make sure that projects now that come into 

preliminary engineering have a really good shot of being funded. 

The short answer is we didn’t do that in the past. 

Mr. DUNCAN. All right. Thank you very much. 

Mr. DEFAZIO. Okay, we will turn to Members in the order in 

which they arrived for questions. Ms. Hirono would be first on the 

Democratic side. 

Ms. HIRONO. I know that we are, today, addressing the proposed 

rule, however, on July 20th, 2007, the FTA issued the New Starts 

and Small Starts evaluation and rating process, which I think are 

the guidelines that FTA intends to use, and pretty much this rating process issuance incorporates many of the factors in the proposed rule. So what is the intention of the rule if you already have 

guidelines that incorporate these rules and you intend to use those 

guidelines, I assume, regardless of whether the proposed rules go 

into effect or not? 

Mr. SIMPSON. Congress asked us to be more transparent in what 

we do and to look at economic development and other factors, and 

at the last hearing we heard from some Members that we weren’t 

really paying enough attention to environmental benefits and the 

like, so, as the program changes, we are trying to change along 

with the requirements that Congress has enacted. So we are putting this proposed rule out to get comment. 

Ms. HIRONO. My understanding is that this July 20th issuance 

already incorporates the weight to be given to the cost benefit asVerDate 0ct 09 2002 16:38 Feb 11, 2008 Jkt 000000 PO 00000 Frm 00027 Fmt 6633 Sfmt 6633 P:\DOCS\38168 HTRANS1 PsN: JASON
16

pects of New Starts and Small Starts, so it seems as though you 

are already going in that direction under these guidelines that 

have already been issued, so I need clarification from you. 

Mr. SIMPSON. Yes. Particularly the Small Starts was a new program and we didn’t have the rule out. We put out what we thought 

would be—I guess what we thought might work in the short run, 

until we had a final rule. So there was a certain logic that went 

along with that, and I think you will see that that logic follows 

what the proposed rule is now, particularly for the Small Starts 

program. Once again, this is for comment, so we are expecting a 

lot of comment from all the stakeholders before we initiate a final 

rule. 

Ms. HIRONO. In other words, then, just so I am very clear on this, 

then, the final rule will trump or will supersede whatever is in 

your July 20th, 2007? 

Mr. SIMPSON. Yes. Right now we have guidance. We have guidance right now. 

Ms. HIRONO. Okay. 

Mr. SIMPSON. We needed a place to start, a placeholder, and we 

are moving towards the final rule, and hopefully that final rule will 

come out sometime in 2008. 

Ms. HIRONO. I have one more question. Has any New Starts 

project ever received a high financial rating, as opposed to the medium rating? 

Mr. SIMPSON. Yes. Yes. Quite a few. 

Ms. HIRONO. Could you provide the Committee with a list of 

those New Starts that achieved a high financial rating? 

Mr. SIMPSON. Yes. We will do that, absolutely. 

Ms. HIRONO. Thank you. 

Thank you, Mr. Chairman. 

Mr. DEFAZIO. That was of interest to me also. We would like to 

see a list of those that have achieved a high rating. 

Mr. SIMPSON. Matter of fact, yours received a high, your BRT 

project in your town received a high rating. 

Mr. DEFAZIO. New Starts and Small Starts. 

Mr. SIMPSON. New Starts as well. 

Mr. DEFAZIO. Okay. Thank you. 

Ms. Hirono, are you——

Ms. HIRONO. I yield back my time. Thank you, Mr. Chairman. 

Mr. DEFAZIO. Okay. 

Mr. COBLE. Thank you, Mr. Chairman. 

Mr. Simpson, the gentleman from Tennessee put a question to 

you that concerns me, and that is the apparent lack of increase in 

the starts that are in the pipeline, and I know you responded to 

that, but am I correct in concluding that maybe one of the reasons 

for this is that it is so difficult that the local authorities just can’t 

get their hands around it? 

Mr. SIMPSON. No, I wouldn’t call it that. It is difficult, but we 

give a tremendous amount of technical assistance in outreach to 

anybody that is interested in a New Starts. It is just that there are 

certain milestones that you need to achieve in order to get into the 

preliminary engineering stages where basically the Federal Government starts to follow the projects through to construction. As I 

said, years ago the entry was very simple. If you had a project, 

17

pretty much you could get it into the preliminary engineering, and 

we found that there was a high failure rate. 

So we figured that sort of prior planning prevents poor performance. Let’s try to do as much planning and let’s try to do as much 

work so that if you do get into preliminary engineering, because 

there’s a lot at stake once it’s in PE, there’s an expectation that 

you are going to have a project, so let’s not disappoint communities 

and the like, so let’s work with folks. And once they’re in PE, many 

times when projects get into this preliminary engineering stage, we 

work with projects that may not be viable and we help—because 

we have been building projects all over the Country and this may 

be a community’s first project, so there are many projects that 

come to us. 

Once they meet the PE milestone, we work with them just like 

partners, investment bankers, and we tell them, you know, maybe 

your project is too long, or you need fewer stations or you need 

more stations, or have you thought about transit-oriented development and the like, have you thought about alternative forms of financing. So we really work very hard with the—we take ownership 

of the project, basically. We work very hard with the grant recipients, and it is very timely. So whatever shortfalls the local community or the transit agency may lack, we really try to help them and 

we give them proper guidance. It is really in that way. I say that 

seriously. We take ownership of the project. 

Mr. COBLE. Mr. Simpson, there have been concerns voiced about 

the proposed rules expanded eligibility to allow New Starts funds 

to be used to build high occupancy toll lanes, popularly referred to 

as HOT lanes, in addition to the high occupancy vehicle, HOV, 

lanes, which are currently allowed. What is the FTA’s statutory authority to amend this regulatory definition, and will this change 

make the treatment of HOT lanes consistent under highway and 

transit law? 

Mr. SIMPSON. We are really trying to help transit projects as 

much as we can, and what we found over time, you don’t see bus 

lanes being constructed any longer, and it is our belief that one of 

the reasons is that cost of a bus lane—I know from my personal 

experience in the northeast, particularly in my old community in 

Staten Island, we have exclusive bus lanes that travel probably 

about 15 miles from one of the suburbs to the center of Manhattan 

or to the tunnels that connect the highway to Manhattan, and 

those bus lanes typically run at about 30 to 40 percent of capacity. 

So on existing bus lanes that transit authorities, in this case, the 

City of New York, they have a bus lane where they are running 

buses, great express bus service, and they have only got 30 to 40 

percent of capacity. 

So it was our thinking, to try to be creative and look for alternative financing methods and to help transit, that the use of an 

HOT to make a bus lane or another lane, an HOT lane, as long as 

you maintain that flow of traffic so that the buses are not bogged 

down, that the HOT lane or the pricing lane, if you will, is incidental to the main purpose of the bus project, but it is also subsidizing the bus project. 

So if you can envision a bus lane that is maybe 30 to 40 percent 

of capacity, now you put cars on the lane up to the point where you 

18

have real-time pricing, up to the point so that you don’t bog down 

that lane and it meets the requirement of at least 5 miles of the 

speed limit, all those cars that are on the lane that are getting that 

what we call free flow, there is a lot of revenue to be picked up off 

of those people that feel that time is money. That actually goes to 

subsidize transit projects. So the person who is sitting in the bus, 

looking out the window of the bus as it travels down the exclusive 

HOT lane, the cars that are on that lane are subsidizing the fare 

box to promote more transit. 

It is very similar to what New York City Transit does when they 

build a tunnel and they put telephone wires and cable and a whole 

host of things in that tunnel. Now, that is an incidental purpose; 

they didn’t build that subway tunnel—they built the subway tunnel 

to drive the train through it, but they are picking up huge revenues to help offset the fare box by allowing these incidental purposes or uses to the tunnel. 

So that’s what the thinking was there. It is a new innovative way 

of thinking to help alleviate traffic congestion, because now, whatever cars that you take off those other free lanes, you are helping 

everybody there. So you are using unused capacity, and we believe 

that since that is not the main purpose of the HOT lane, it is incidental, it is an ancillary purpose, that we are perfectly within the 

statutory authority to do that. 

Mr. DUNCAN. Well, I think, Mr. Chairman, any time we can take 

action to improve congestion, which inevitably negatively impacts 

productivity, results in additional consumption of gasoline, I am endorsing that. Thank you, Mr. Chairman. 

Mr. DEFAZIO. Mr. Simpson, if you could, since you gave a long 

explanation, but at the very end I thought you sort of brushed over 

the question. Again, he started the question with what do you believe is your explicit statutory authority. Could you just get back 

to that? It sort of was incidental at the end. I think what you said 

was because it’s incidental, or something, that somehow you found 

it was statutory. 

Mr. SIMPSON. I think it is best if I give you another example. 

Mr. DEFAZIO. No, I don’t want examples. Just what statute are 

you referring back to? I mean, what is the expressed statutory authority to use these funds for HOT lanes? Because you could argue 

the other side of the argument, which is the Federal funds that go 

to construct the HOT lanes are subsidizing the non-transit use of 

that lane, at least initially, because later, perhaps, you will realize 

the potential of those additional revenues and maybe you will pay 

back the additional investment was made. So what is the statutory 

authority? 

Mr. SIMPSON. Well, first, our intent is that whatever Federal dollars from the FTA program are utilized, it is for the transit portion 

of the project only. That is what our intent is. Secondly, can I get 

back to you for the record fully with where in our statute, because 

I don’t have that? 

Mr. DEFAZIO. Yes, we would like that. Thank you. 

Mr. SIMPSON. Okay, thank you. 

Mr. DEFAZIO. Mr. Mitchell. He left also? Okay, then we go to Mr. 

Bishop from New York. 

Mr. BISHOP. Thank you, Mr. Chairman. 

19

I want to just follow up on the question that you were just asking. In the Notice of Proposed Rulemaking, you also create a new 

category called Very Small Starts. So my first question is what is 

the explicit statutory authority under which you are creating that 

category. 

Mr. SIMPSON. Well, I don’t know that we have an explicit statutory authority, but, once again, we have a lot of really good thinkers at FTA that do a lot of transportation modeling, and we have 

got economists. We know that when you build a transit project, the 

complexity of forecasting and all those other things increases exponentially the larger the project is. So when you start to get to like 

your project on the Long Island Railroad, the East Side Access 

project, as these projects start to get complex, the forecasting, all 

those things and all those requirements that you need to measure 

in order to determine whether you are going to rate the project a 

pass or a fail, get a lot harder. 

We just happen to know, from working with all of these transportation models, that if you have at least 3,000 riders a day,—and 

there are two or three other requirements—that the project is no 

more than a $3 million a mile, and a couple of other things, that 

it automatically would meet our requirements because we have just 

seen that over the pipeline. So it is sort of like a preapproval, if 

you will. 

Mr. BISHOP. Let me just stay on that for a second. The $3 million 

per mile, in response to a question from Mr. Coble, you just indicated that one of the goals was to help transit projects as much as 

you could. By creating or imposing this $3 million per mile limit 

on Very Small Starts, does that not eliminate certain types of transit projects like streetcars? 

Mr. SIMPSON. No, not at all, no. See, what we are saying is—I 

left out the most important thing. The project has to be less than 

$50 million. So if you happen to have a project that is less than 

$50 million, it costs less than $3 million a mile to implement, and 

it has got 3,000 riders a day, it is basically a preapproval. We know 

that that will meet the requirements because it is really small in 

nature, the complexity is not there, and we just happen to know, 

in studying these projects and funding projects before we had the 

Small Starts program, even, or these exempt projects, that these 

projects meet the criteria. 

You know, it is a proposal. If the desire of Congress is not for 

us to label that or have that, we will note that in the comment here 

today. But it is certainly not to exclude any project, because there 

is the regular, you have got the Small Starts program and you 

have got the New Starts program as well. So there is no limitation 

on anything, it is just that, hey, by the way, community, if you 

happen to have a project that meets that litmus test, it looks good. 

Mr. BISHOP. And, again, not to be difficult, but in response, I believe, to a question from Ms. Hirono, you indicated that one of the 

goals here was transparency, improved transparency. Are you not 

at odds with that goal by virtue of layering all these both new designations and new requirements onto the NPRM? 

Mr. SIMPSON. I kind of think we are just trying to be customerfocused. It is like if you go into a bank and buy a mortgage, you 

want a fixed rate, an adjustable rate, or a one-year ARM. It is just 

20

another option for people that may have a small project that they 

need to fund quickly. So I don’t really know how to respond to that 

other than, when we get the comment, if the transit industry or the 

stakeholders don’t like it, this is a Notice of Proposed Rulemaking. 

Mr. BISHOP. Thank you very much. 

Thank you, Mr. Chairman. 

Mr. DEFAZIO. If I could, just following up on that. I would agree with the gentleman from New York. I believe that the $3 million 

per mile yardstick would exclude any streetcar project—and that is 

the consensus in the transit community across America—from the 

Very Small Starts program. We are not aware of any that have 

been built for less than that. In fact, it would exclude many BRT 

projects that have enhanced guideways and those sorts of things. 

So, pretty much, I think we are just going down to—maybe this 

would help the HOT lane issue or something. I don’t know what 

the objective is here, but you are excluding streetcars, as far as I 

am aware. If you have any evidence of any streetcar project that 

came in and has applied for Very Small Starts under $3 million a 

mile——

Mr. SIMPSON. The only streetcar project that we have right now 

is a project that is out on the West Coast at about $140 million or 

$150 million. 

Mr. DEFAZIO. Right. And people aren’t applying because they 

just know they can’t meet the criteria. 

Mr. SIMPSON. I don’t know that that is the case, Mr. Chairman, 

but we will note that. 

Mr. DEFAZIO. Well, anecdotally, I mean, you say you want to be 

customer focused—I guess let me just ask this and then we will go 

on the next. If you are going to be customer-focused, you are going 

to be real attentive, then, to the majority opinion expressed on the 

NPRM, which I believe will be echoing a number of the concerns 

you have heard here today. 

Mr. SIMPSON. Mr. Chairman, but to answer the earlier question, 

if they don’t meet the criteria, they can still apply under the Small 

Starts program. 

Mr. DEFAZIO. I know. But you are basically excluding them from 

the Very Small Starts program. 

Mr. SIMPSON. Well, no, we are saying—no, we are not. 

Mr. DEFAZIO. Because you are establishing——

Mr. SIMPSON. No, I don’t believe that we are. I really hadn’t 

given it that much thought, but I asked Mr. Steinmann and he said 

no. 

Mr. DEFAZIO. Well, you set the $3 million bar, which isn’t part 

of Small Starts. 

Mr. SIMPSON. But all that we know now is that if you meet these 

requirements, the project works. Once you get beyond any of those 

limitations, then we really have to study the project. That is all we 

are saying. 

Mr. DEFAZIO. Yes, but you are excluding a mode is I think the 

point. Anyway, we won’t belabor it. 

We will turn now to Ms. Fallin. 

Ms. FALLIN. Thank you, Mr. Chairman. 

Mr. DEFAZIO. You will probably be the last set of questions before the votes. Go ahead. 

21

Ms. FALLIN. All right. 

I have one question, Mr .Simpson. How does the new rule requiring the FTA to incorporate congestion relief benefit into the New 

Starts process? We talked a lot about congestion on our highways. 

How will that new rule help with that? 

Mr. SIMPSON. Well, one of the things that we are doing is right 

now, if we had a congestion program with a pricing component—

or let me just back up a step. We don’t measure now the impacts 

and the benefits. When we build a transit project, there will be a 

certain amount of cars that come off the highway as a result of 

that, and the people that remain on the highway receive a benefit 

because there are fewer cars. We don’t measure that in our costeffectiveness, so we think that it is a benefit that is really out there 

for people. 

So the first question is to ask that and to try to—we are going 

to work with the Federal Highway Department to try and come 

with a model so we can measure that benefit, because it will help 

all projects, particularly projects—well, any transit project. It will 

help any transit project. So that is the first thing that we are asking the question and proposing to do. 

The second thing we are saying is that if you have got a congestion program in place in your town and it happens to coincide with 

a transportation project, that we will give you a benefit as a result 

of that. If you have a pricing strategy, we will give you one up tick 

in your rating because you are, in effect, getting more cars off the 

road and there is a benefit to transit that we don’t capture that 

now. When we do our forecasting to figure out the ridership that 

supports the finances of a transit project, we have got no method 

of—because this is somewhat of a new kind of thing, these HOT 

lanes and all that. We have no way to measure the extra riders 

that would ride on transit as a result of that. 

So we are saying we think we have some things right now with 

VMT reductions, vehicle miles traveled, and the like, and we are 

also trying to respond to the fact that we know we have a nationwide crisis on highway congestion, and we are trying to do whatever we can to alleviate that and to assist transit while we do so. 

I think that sums it up. 

Mr. DEFAZIO. Okay, thank you. 

Mr. Baird, go ahead. We are going to have two votes, so Mr. 

Baird will ask his questions, then we will recess and come back for 

a few other questions. 

Mr. BAIRD. First question is very quick. Under the fixed guidelines proposal, would ferries still qualify? 

Mr. SIMPSON. I believe they do. Yes. 

Mr. BAIRD. That’s good. Secondly, in my district, we are working 

on the Columbia River Crossing project, and there is a debate right 

now, should we go light rail, should we go buses. The advocates of 

light rail point out that we can connect to the very successful light 

rail system that Portland and vicinity have put in place; others 

look at buses as having relative advantages. 

To what extent do you prejudice the decision through your proposed rulemaking and to what extent would you take into account, 

if there were to be a light rail proposed, because it links up to exVerDate 0ct 09 2002 16:38 Feb 11, 2008 Jkt 000000 PO 00000 Frm 00033 Fmt 6633 Sfmt 6633 P:\DOCS\38168 HTRANS1 PsN: JASON
22

isting light rail, how would that decision-making process be affected by your proposal? 

Mr. SIMPSON. Well, it is a simple question with a difficult answer, and I will try to be as quick as I can with it. We measure 

each project on its own merit and we look at the alternatives. Basically, a bus rapid transit or a bus project would be less expensive 

than a fixed guideway project like light rail. 

So, before we look at the cost-effectiveness, we say, okay, where 

do we need to be out in terms of our transportation alternatives? 

What is the best thing we can do short of the fixed guideway? And 

we do a model on that. Then we figure what is the delta, the difference in cost between that bus project, if you will, and the fixed 

guideway project. We take the cost of that plus the operating costs 

and we look at the differences in travel time savings, how much 

more time do we save with the fixed guideway project, which creates a problem for some folks, but it is a metric that we use and 

we have used it consistently. 

Then there are other attributes that are associated to a fixed 

guideway project like the reliability of rail; you don’t have to worry 

about traffic jams. People like to sit in a rail car; they know where 

the tracks are. There are a bunch of things we call a modal constant. So we give another benefit to the fixed guideway in terms 

of time, because we want to keep it consistent, so the whole thing 

is done in time. 

So we look at that project and we look at all of our metrics and 

we say, okay, now, based upon what the alternative was and this 

new project, does the project meet our cost-effectiveness criteria 

along with the other statutory requirements, weighting cost-effectiveness as a key indicator, 50 percent of them. 

Mr. BAIRD. So stay with the practical application. It is helpful. 

Mr. SIMPSON. Yes. 

Mr. BAIRD. So in our community we have got a citizens’ commission plus the two departments of transportation trying to make decisions. What are the relative differences? They are trying to decide 

right now which do we go with. 

Mr. SIMPSON. Right. 

Mr. BAIRD. How do they factor in your decision-making process 

and outcome in terms of deciding what they think is the right thing 

to do? 

Mr. SIMPSON. They have a transportation plan, a long-term plan, 

a medium plan. Typically, it is financially constrained; how much 

money do they have to do the project. And when they look at a corridor, they look at the transportation problem and how best to 

solve it, and they decide, the local community, not FTA, decides on 

locally preferred alternative. The folks that really do their planning 

in advance have an idea whether or not those guidelines, if they 

wanted a light rail, whether it would meet the Federal requirement 

or not. So there is a lot of that. That is why we want to get with 

the MPOs in the transit agencies early in the process so we can 

help them, so they don’t bring us an alternative that might not 

be——

Mr. BAIRD. What would be the funding difference? What kind of 

magnitude of funding difference might—let’s suppose our community comes to you and says if we go light rail, it will cost X, if we 

23

go bus rapid transit, it will cost Y. How much do you kick in on 

the choice? 

Mr. SIMPSON. Do you mean how much is the Federal share? 

Mr. BAIRD. Yes. 

Mr. SIMPSON. We look at the project, we look at the size of the 

community, the benefits that are derived. On average, we look at 

a 50/50 contribution. If it is a mega project, if it is a project that 

is in the billions of dollars, around a third, because we do have a 

limited amount of funding. 

Mr. BAIRD. But my point would be if it’s 50/50, would you fund 

50/50 for bus and also, then, 50/50 for light rail, if they choose 

that? 

Mr. SIMPSON. It depends. We would look at really what project 

winds up coming through the pipeline. We try to have those discussions as early as possible so the transit agency knows what the financial commitment is of the Federal Government. 

Mr. BAIRD. Might you be in a position to say we will match 50 

percent if you do bus rapid transit, but only 20 percent if you do 

light rail? Or if they choose light rail——

Mr. SIMPSON. No, we don’t do that because we believe it is a local 

decision. We really don’t directly—maybe indirectly if they don’t 

meet cost-effective, but we don’t directly tell which city what mode, 

whether it be a fixed guideway or——

Mr. BAIRD. So they don’t necessarily have to factor that in. 

Mr. DEFAZIO. There are three minutes remaining to the vote, 

Brian. You have a little bit of time left, so you can finish up when 

we come back. 

Mr. BAIRD. We will get to this later. 

Mr. SIMPSON. Okay. 

Mr. DEFAZIO. Thank you. 

We will recess probably for 10 to 15 minutes. 

Mr. SIMPSON. Thank you. 

[Recess.] 

Mr. DEFAZIO. The Subcommittee will come back to order. 

We appreciate the Administrator’s and the other witnesses’ tolerance of our hectic schedule. 

I guess, sort of following up on a subset of Mr. Baird’s questions. 

First, as I would understand, when you are talking about approximately 50/50, you are talking about very large projects, where a 

smaller share was requested, is that correct? 

Mr. SIMPSON. Usually, the grant recipient comes to us with a 

plan. We take a look at a whole bunch of things: how we funded 

other projects, how much money is left in our statutory authority, 

things like that; what is the ability of the grant recipient to pay 

their share. So there are a whole host of things, and it is usually—

that is never really an issue, Mr. Chairman, with a grant recipient, 

in terms of funding projects. But we don’t dictate in any way what 

the Federal share is. 

Mr. DEFAZIO. But this all then gets back somewhat to cost-effectiveness. I mean, the issue is if in a local jurisdiction there are contributions that constitute betterments that are no burden on the 

Federal taxpayer, contributed by the local business community, developers, whatever, local improvement district was formed that 

paid for them, however they were paid for, do those get cranked 

24

into the cost-effectiveness? And if so, why, because I don’t think 

that they should be. 

Mr. SIMPSON. Mr. Chairman, you are not alone in that regard. 

We actually asked the question in the NPRM. Right now there are 

two things. You can have several definitions of betterments, but 

betterments are components of the project that are not essential, 

so that if you do away with the betterments, you still get all the 

benefits of the project. An example might be—although my wife 

wouldn’t like this example—art work in the stations. Art is a betterment. 

So right now the betterments are captured, so what we do sometimes, we tell the grant recipient, if they don’t meet cost-effectiveness, are there any betterments that you can take out? You know, 

how many betterments can you take out and still keep the project? 

So we are trying to get to the point where, hey, what are the essential components of a project. Then we ask the question, in terms 

of betterments, do we need to count those or should we count those, 

because, particularly with the private sector, as you hit on, private 

sector sees the value in transportation projects and currently, if 

there was any private sector contribution, we count that. 

So the question that we ask is if we have a particular project—

and there are a lot of projects where developers, landowners, private interests see tremendous value that accrue to them as a result 

of this federal-State investment—should we or could we exclude 

those contributions to cost-effectiveness. And the rationale for that 

would be if it is not costing the taxpayer any money, there is a betterment as a result of that, there is something that is accruing, like 

a donation from the private sector, so we believe that that has 

merit to look at, so we have asked the question. 

And that might also help some of these other projects that, as 

you mentioned, streetcars, where there is certainly a value to developers and people particularly close to the investment. They see 

a value, and many streetcar projects are being funded privately, so 

we asked the question if we have a project that were to come forward before the FTA, if there is a private contribution, should we 

exclude the private contribution from the project and from cost-effectiveness. 

Mr. DEFAZIO. So that is outstanding as one of the questions in 

the rule? 

Mr. SIMPSON. Yes. 

Mr. DEFAZIO. And you are taking comments on that? 

Mr. SIMPSON. And would like to get comment on that. 

Mr. DEFAZIO. Because it seems to me part of the rationale for the 

cost-effectiveness criteria is, one, to have a screen, but, two, theoretically, to look at what is the cost-benefit for Federal taxpayers. 

You are also looking essentially at financial soundness, risk, debt, 

those sorts of things, and if the betterments are not constituting a 

financial overhang that has the potential to bring this system 

down, I don’t see why they would have to be calculated in at all; 

and/or if you built the system and the betterments were essentially 

an add-on and someone added on the betterment after the system 

was approved or built, we wouldn’t count it. I mean, at that point 

you can’t count it, right? 

25

Mr. SIMPSON. I can’t express my view on it because we have the 

rule, but I hear what you are saying. 

Mr. DEFAZIO. I understand. 

Mr. SIMPSON. You know, that might also—you know, when we 

talk about economic development with respect to certain projects, 

that we are not measuring economic development, particularly, you 

know, we put the cards out on the table, this streetcar projects, addressing that question might be able to give you the—what is the 

true economic value of a streetcar project? Well, maybe it is that 

value that the private sector decides that they feel that it is worth 

that is given as a contribution to a project and excluded from costeffectiveness. 

Mr. DEFAZIO. Again, further on economic development, you mentioned in your testimony that you have engaged a consultant? 

Mr. SIMPSON. Yes. 

Mr. DEFAZIO. Are the results of that consulting going to be accommodated in the rule or is this consulting result going to come 

in after the rule is already finished? What is the timing on that? 

Mr. SIMPSON. I can’t give you an answer on that right now, I 

don’t know. 

Mr. DEFAZIO. Okay. But it seems that if you have gone to the 

trouble and expense of engaging a consultant, that hopefully that 

contract will be structured in such a way that it will inform the 

rule, since it is a statutory criteria. 

Mr. SIMPSON. Absolutely. And it is a priority and we have got a 

meeting here in Washington, D.C. on October 17th with nine of the 

Nation’s top transportation experts to discuss economic development as part of the phase two. 

Mr. DEFAZIO. Okay. Could we get a list of those and what firms 

or organizations they represent? 

Mr. SIMPSON. Yes, you can. 

Mr. DEFAZIO. Okay, great. Thank you, Mr. Administrator. Appreciate that. 

Now, I have a question, and it seems to me it is a no-brainer, 

but apparently there is some theory or controversy out there, and 

that is the issue of does transit provide significant—in fact, there 

was a press conference going on upstairs just before this with 

APTA talking about the benefits of mass transit in terms of congestion mitigation and the amount of fuel it saves. I mean, you can 

quantify it to a great extent. So is it the position of the department 

that these projects, absent this ancillary action by another body to 

impose congestion pricing or something, but just the construction 

of a transit project itself, is it intended to mitigate congestion? 

Mr. SIMPSON. A transit project serves a whole host of purposes. 

As you know, it promotes good economic development, environmental benefits, and also to alleviate congestion, as outlined in 

SAFETEA-LU. 

So I don’t know if I understand the question, but I am agreeing 

with you that it achieves all of those things. 

Mr. DEFAZIO. All right. Okay. Well, no, there are some people 

out there saying transit sort of exists, but it is really not addressing congestion; they sort of take it for granted and don’t—I mean, 

if you had a strike tomorrow and shut down the New York subway, 

I think what a benefit it had been. 

26

Mr. SIMPSON. That is exactly what thought came to mind when 

you mentioned that. If somebody is not sure that transit fights congestion, then they need to take a look at the articles in New York 

or anyplace else that had a transit strike, or even just a service 

failure or disruption of service as a result of a power outage. 

Mr. DEFAZIO. Right. Okay. I see that I have been joined by the 

Ranking Member. 

Oh, do you have some questions? Okay, I recognize the gentleman, Mr. Dent. 

Mr. DENT. Thank you, Mr. Chairman. 

Mr. Simpson, I realize I came in after you presented your testimony, but I just wanted to relay some comments to you and just 

ask for your response. In my community there is a lot of talk about 

passenger rail from the New York metropolitan area into the Lehigh Valley of Pennsylvania—Allentown, Bethlehem, and Easton. 

The lines currently run to around Clinton, New Jersey, and getting 

them from Clinton to the western edge of New Jersey and Phillipsburg is, of course, a challenge. There is talk about running passenger rail from Lansdale, just north of Philadelphia, up to a community called Quakertown, a lot of talk about it. 

And I would like you to comment, too, if the community were to 

express interest in a New Starts program or Small Starts, what 

should I tell them about the local matching requirements? What 

would be their obligation for that type of a passenger rail project? 

Mr. SIMPSON. First of all, I am very familiar with that alignment. 

I have spent, I don’t know, hundreds of days in Allentown and the 

whole 78 corridor, and was just in Clinton, New Jersey two weeks 

ago. 

Mr. DENT. And there is a study going on right now on the 78 corridor. 

Mr. SIMPSON. There is a study. I think in that particular case, 

I think there would be some sort of a bi-State agreement between 

New Jersey and Pennsylvania. 

Mr. DENT. That is correct. First phase was completed as it relates to non-rail options and we are developing the rail phase now. 

Mr. SIMPSON. Not dissimilar to what we do elsewhere, I think 

that we would need to get all the stakeholders in a room and determine who would be the grant recipient for the project; what would 

be the entity, do you need to create a new entity; and what is the—

you know, you have got two States, so what is the share of the dollars that would flow through. You may have to develop a port authority or some sort. But if you would like, we would be more than 

happy to contact your office after we leave here and fill you in, because the FTA would be very helpful in assisting your community 

with that proposed commuter rail line, I believe it is. 

Mr. DENT. Yes, commuter rail. And I guess that is the question, 

too. Oftentimes I tell the community that there will be a local 

match requirement. 

Mr. SIMPSON. Right. 

Mr. DENT. And what are you stating as official policy for the FTA 

now in terms of local match for these types of New Starts? 

Mr. SIMPSON. Official policy is that you need to come up with at 

least 20 percent, and we would encourage an overmatch, anything 

above that; and then it depends on the community’s ability to conVerDate 0ct 09 2002 16:38 Feb 11, 2008 Jkt 000000 PO 00000 Frm 00038 Fmt 6633 Sfmt 6633 P:\DOCS\38168 HTRANS1 PsN: JASON
27

tribute their share, along with what we have done historically in 

the past, we like to have a level playing, and within the transit 

community there is sort of an understanding of how much money 

you should ask for given the certain size and complexity of a 

project. 

Mr. DENT. Is that local funding requirement consistent for both 

New Starts and Small Starts? 

Mr. SIMPSON. It is the first thing we look at, and that is where 

we get into a lot of problems, where we believe there is a commitment on a local level and then, as time passes, for one reason or 

another, the local commitment fades, and that is why the project 

becomes a no-start. 

Mr. DENT. Well, I would be very happy to further discuss this 

issue with you. 

Mr. SIMPSON. Absolutely. We will contact you as soon as soon as 

we leave here. 

Mr. DENT. Thanks for your testimony. 

Okay. And just one final question that I have. The FTA, as you 

know, has been working with FHWA to develop a mobility measure 

that explicitly includes congestion relief benefits to highway users 

and pedestrian ridership of transit systems. What is the status of 

that effort? 

Mr. SIMPSON. We have allocated some research dollars. I believe 

it is $100,000. We are working with FHWA as we speak because, 

as this Committee asks us to do all the time, to measure all of the 

benefits that accrue to a given transportation project, and what we 

don’t measure right now is if we were to build a new transit project 

in a corridor—let’s take your project. Let’s say we build your 

project. 

What we haven’t been able to do is—and let’s say I-78 from Allentown going to Newark, everybody wanted to go to Newark on I78, and we are at peak period in the travel, you know, it is congest. 

The I-78 can get congested, as you know. So let’s say the transit 

project is good enough where we are able to take off a portion of 

those vehicles that now ride transit. Well, we pick up the benefit 

of the folks riding transit, but we don’t pick up the travel time savings that accrue to the people that stay in the automobiles. 

So what we are saying is—I mean, this would be the best case 

scenario—if it took an hour to get from Allentown to Clinton in 

traffic, maybe it would take 40 minutes for all those other drivers 

if we took 5 percent of the drivers off the road. We want to be able 

to measure that and measure that within cost-effectiveness, because it truly is a benefit of travel time savings. 

Mr. DENT. Thank you. I will yield back to the Chairman. 

Mr. DEFAZIO. Ms. Hirono, do you have further questions? 

[No response.] 

Mr. DEFAZIO. Mr. Boozman? 

Mr. BOOZMAN. Very quickly. We appreciate your being here. You 

said that you needed at least 20 percent. In reality, what is that 

percent really, though? Now, because of the——

Mr. SIMPSON. An average? I would say it is averaging about 50 

percent. 

28

Mr. BOOZMAN. So it is about 50. And that is just because of the 

competition, the people that are saying that they will come up with 

50 percent? 

Mr. SIMPSON. Well, you know, it is a whole host of things. I 

mean, if we have got a couple of projects in New York that were 

mega projects, literally in the billions, so you could easily wipe out 

20, 30 percent of the statutory authority if you were to fund it at 

the maximum. So we really work closely with the transit agencies, 

and that has really not been a problem with us. We bend where 

we have to. You know, I am surprised that there are that many 

questions on that topic, but that is something that never crosses 

my desk, it is really never an issue. I guess there is an understanding out there with the transit properties where we are at on 

that. 

Mr. BOOZMAN. So there is enough competition out there that people will come up with the dollars up to the 50 percent? 

Mr. SIMPSON. Yes. 

Mr. BOOZMAN. It makes it tough if somebody without as much 

resource only has a 20 percent. That really——

Mr. SIMPSON. We understand that and we work with the grant 

recipients. 

Mr. BOOZMAN. Okay. Thank you very much. Thank you for being 

here. 

Mr. SIMPSON. Thank you. 

Mr. DEFAZIO. One last question. SAFETEA-LU authorized a 

study that is being, as I understand it, done jointly under the auspices or sponsorship of FTA and HUD, Reconnecting America, 

which is to—we have been talking about sort of the economic benefits that result from transit projects, but we haven’t really gotten 

into this aspect of it, which is the linkage between affordable housing and transit, and I am wondering when that study’s results are 

going to be available. Again, it is sort of like my last question. Are 

those results going to be available before you finalize your NPRM? 

Mr. SIMPSON. Mr. Chairman, to my knowledge, that study has 

been published and it has been out for at least six months. 

Mr. DEFAZIO. Okay. 

Mr. SIMPSON. And if you would like to talk about the results of 

the study, I can, but the study has been—and I apologize if your 

office has not gotten a copy of it. 

Mr. DEFAZIO. So, again, those results will inform the rule to 

some extent. To the extent they find there is a linkage between affordable housing or the potential for affordable housing would seem 

to me, again, to be a benefit that would need to be looked at in 

evaluating transit projects. 

Mr. SIMPSON. You know, we do that within the mobility factor, 

but I will tell you what the takeaway for me was with that study. 

We have said it here, that as a result of building transportation 

multi-use development around transit nodes, the price value goes 

up. It is more expensive to rent an apartment or to buy an apartment or a home which is within walking distance of a transit property. And the people who need to be able to walk and to get to work 

the most are the people sometimes who can’t afford it, and it is a 

concern that we have at FTA and it is a concern that HUD has, 

and we have talked about it. 

29

Mr. DEFAZIO. Sure. Well, that is a general urban redevelopment 

rule of thumb, but some communities, for instance, not to be totally 

parochial, but Portland has a requirement on the developers that 

they provide a certain number of affordable units in doing their developments. So, I mean, the question is since we talked about you 

get scored for planning and those sorts of things, would you get 

some benefit or scoring for having a policy to provide affordable 

housing in these corridors? 

Mr. SIMPSON. Absolutely. We capture it under transit dependent 

mobility, and it is——

Mr. DEFAZIO. So that will be expressed in the final rule, then, 

that this would be——

Mr. SIMPSON. Well, the proposal that we have right now on the 

street clearly articulates that. 

Mr. DEFAZIO. Because it certainly would—some entities haven’t 

done that, and it would certainly potentially encourage entities who 

are interested in qualifying a project to undertake to see that, as 

the development took place, that they were providing for some 

place for affordable housing. 

Mr. SIMPSON. Well, FTA and the DOT believes in that and HUD 

believes in that and the Administration believes in that, so we will 

make sure that it is part of it. 

Mr. DEFAZIO. Okay, thank you. I have no further questions. 

Mr. Duncan? 

[No response.] 

Mr. DEFAZIO. All right, with that, we thank you once again for 

providing your time and your expertise, Mr. Administrator, and we 

look forward to a totally transmogrified final rule. 

Mr. SIMPSON. It has been a pleasure and honor to be here, and 

as I said in the past, I look forward to our next hearing. 

Mr. DEFAZIO. I would call the next panel: Mr. Christopher Zimmerman, Arlington County Board Member; Mr. Michael Townes, 

Hampton Roads Transit; Mr. Mark E. Huffer, Kansas City Transportation Authority; and Ms. Shelley Poticha, Reconnecting America, although she does have an Oregon connection. 

TESTIMONY OF CHRISTOPHER ZIMMERMAN, ARLINGTON 

COUNTY BOARD, BOARD MEMBER, ARLINGTON, VA; MICHAEL TOWNES, HAMPTON ROADS TRANSIT, EXECUTIVE DIRECTOR, HAMPTON, VA; MARK E. HUFFER, KANSAS CITY 

AREA TRANSIT AUTHORITY, GENERAL MANAGER, KANSAS 

CITY, MO; AND SHELLEY POTICHA, RECONNECTING AMERICA, PRESIDENT AND CEO, OAKLAND, CA 

Mr. ZIMMERMAN. I have always thought it should be a prerequisite for service in higher office that one serve in local government first. 

Thank you, Mr. Chairman and Members of the Subcommittee. I 

am pleased to be here this morning. I am Chris Zimmerman, a 

member of the County Board of Arlington, Virginia, right here 

across the river, in which capacity I serve on the various regional 

transportation bodies around here, like the Washington Metropolitan Area Transit Authority and the Northern Virginia Transportation Authority. 

30

I have submitted, of course, a full statement for the record, but 

I just wanted to make a few comments and then answer your questions. 

The community that I have the opportunity to represent is today 

a very thriving urbanizing community that enjoys extremely low 

employment, extremely low office vacancy rates, and is widely cited 

as a model of what is now called smart growth nationally and even 

internationally. Five years ago, when the Environmental Protection 

Agency gave their first smart growth award for overall excellence, 

it was to Arlington for the Roslyn-Ballston corridor. 

That stands in contrast to where it was a generation ago, when 

it was a fairly typical declining inner ring suburb, with declining 

population, with schools that were emptying out, with retail that 

was really dying. When you wanted to go to a restaurant, you went 

outside. When you wanted to go shopping, you went outside. 

It has really turned around in the last generation largely because 

of the foresight of people who served before me, but also because 

they were able to leverage a big public investment with a significant Federal contribution in the Metro system, and then use that 

effectively to create the Roslyn-Ballston corridor and the Jefferson 

Davis corridor, which are about 10 percent of the land area of my 

very small county, smallest county in America, effectively at 26 

square miles. Ten percent of that land is generating half the tax 

revenue that we collect. 

The 26 square miles in Arlington, out of a Northern Virginia region of over 1,000 square miles, accounts for about 60 percent of 

the transit ridership. Sixty percent of all trips in Northern Virginia 

begin or end in Arlington. We have some of the highest transit 

usage, with over 23 percent of rush hour trips being made—of 

workday trips, I should say, being made on transit; and in our 

Metro corridors it is more like 40 percent. 

Now, the reason I cite all this is that I believe that if the rules 

that are in place now, or that are proposed now, were in place at 

the time, that that transit investment could not have been made. 

I don’t believe Arlington would have qualified for the funding that 

made this possible under the regulations as they are now being 

pursued by the FTA. As it happens, today we are looking at the 

next generation of transit development, and we are looking both to 

redevelop in the Crystal City area, where we have the biggest impact of BRAC from the last round anywhere in the Country, with 

18,000 jobs scheduled to leave Crystal City; and we are looking at 

what has to be done to make it again a vibrant economic center, 

and we are looking at transit investments obviously as part of that. 

Not far from there and connected to it, hopefully, is the Columbia 

Pike corridor, where we are looking to transform what has been an 

automobile-oriented strip into a more walkable main street, and we 

have a streetcar project, very much modeled on the Portland streetcar, which we think has the same kind of potential for economic 

growth and transforming an area, really, that you have seen in 

Portland. 

However, we don’t think that the current rules will make it possible for us to get any help from the FTA and the Federal Government the way they are proposed now, and we are looking at what 

we have to do and what we can accomplish on our own because we 

31

really don’t see any way that we would qualify. The specific rules 

that are being promulgated would make it very difficult for our 

projects to qualify, which seems fairly strange because they look 

like exactly the kind of projects that you intended in passing the 

last law. 

The Columbia Pike streetcar project, for instance, which is about a five to six mile stretch, is a project under $250 million, probably 

$120 million, $140 million, something like that. If we could get 50 

percent money, then $60 million, $70 million, something like that, 

would seem to be within the parameters. But the way the rules are 

being promoted, we would not likely qualify. 

The ridership that we have been able to encourage already is 

held against us rather than working for us. The additional funds 

that we will put in and the higher costs that are involved in an 

urban area work against us, even when we are spending our own 

money. So, in short, this is fairly frustrating and seems to us to 

be counter to the intentions of Congress in passing the last act. 

Finally, let me just say that I think our commitment to transit 

as an integral part of community and economic development would 

be the model that was intended and that you would want to promote in the interest not only of our region, but the Nation, but it 

doesn’t seem to be the model that the proposed regulations would 

promote. 

Again, Mr. Chairman, thank you very much for inviting me here. 

I look forward to your questions. 

Mr. DEFAZIO. Thank you, Mr. Zimmerman. 

Mr. Townes. 

Mr. TOWNES. Thank you, Mr. Chairman. It is an honor to be here 

with you today. I appreciate the opportunity to testify on the Notice 

of Proposed Rulemaking. I want to note that while I am the incoming chair of the American Public Transportation Association, the 

testimony that I present today represents my views, and not those 

of APTA, regarding the proposed rulemaking. 

I also want to note that on October the 1st, the City of Norfolk, 

Virginia, the entire Hampton Roads region and HRT will celebrate 

the signing of a full funding grant agreement for $232.2 million for 

a 7.4 mile starter light rail line in the City of Norfolk. I want to 

thank Congresswoman Drake, who was here earlier, for her strong 

consistent support of this project, as well as Administrator Simpson 

for making this project a reality. 

I don’t have enough time to touch on all the points that I think 

are important with the proposed rulemaking, but I will touch on 

three in the time that I have, and that includes provisions not included in SAFETEA-LU that are in the proposed rulemaking, the 

land use and economic development measures weights, and the 

weight given to cost effectiveness, things you have talked about 

earlier today. 

The Notice of Proposed Rulemaking contains provisions that 

were not addressed by Congress when it adopted the Safe Accountable Flexible Efficient Transportation Equity Act, a legacy for 

users, but represents substantial changes to the New Starts program. The proposed rulemaking would change the definition of 

fixed guideway and allow New Starts and Small Starts funds to be 

used for high occupancy toll lanes. This proposed change is not 

32

found anywhere in 49 U.S.C. 5309. This change is intended to alter 

the purpose and focus of the New Starts program. The only conclusion that can be drawn from this proposed change is that the FTA 

intends to diminish the historical investment and traditionally 

fixed guideway projects. 

I would also note that there is no requirement that the transit 

service which served to establish the amount of the section 5309 

investment be maintained after the project is built. Now, why 

would the FTA support funding a project where there is no ongoing 

commitment to maintaining transit service in the corridor? 

The proposed rulemaking also seeks to redefine these projects 

that are eligible under the Small Starts program and develop a 

program that is not neutral as to project eligibility or the level of 

project review. 

I have identified those changes in my written testimony; I won’t 

belabor that point. 

With regard to land use and economic development measures 

and weights, Congress amended section 5309 in SAFETEA-LU by 

emphasizing the importance of land use and economic development 

when it moved these criteria from the consideration subsection to 

the project justification subsection. To the outside observer, it 

seems clear that the intent of Congress was to put greater weight 

and emphasis in the New Starts project evaluation and review 

process on land use and economic development. Instead, the proposed rulemaking diminishes the weight to be given to land use by 

combining it with economic development as a single factor and assigning only 20 percent to that weight. 

Moreover, 5309 establishes separate criteria for land use and economic development, which would appear to clearly indicate an intent by Congress to develop separate measures for each. Instead, 

the proposed rulemaking not only reduces the weight and emphasis 

given to land use and economic development, but merges them into 

a single criteria rather than developing separate measures. 

Furthermore, FTA states that the cost to develop a measure for 

economic development that is distinctive from land use is overly 

costly and burdensome. Now, I don’t recall that the cost or burden 

on transit authorities was an issue when FTA developed the Summit software and implemented the TSUB measure for cost-effectiveness in 2002. While I don’t know what it costs FTA to develop 

the software and implement TSUB, many communities, including 

mine, were required to spend several hundred thousand dollars to 

revise travel demand models to be able to interact with Summit 

and capture the user benefits in ridership. 

Finally, FTA should be rewarding communities that seek to concentrate economic development in project corridors or at stations 

through the use of local policies and incentives. The benefits of a 

project are not measured solely in terms of mobility improvements, 

but also on the impact of shaping economic development patterns. 

Finally, weights given to cost-effectiveness. Prior to the March 

and April Dear Colleague letters, FTA employed a multiple measure approach that enabled a medium or medium-high rating for 

land use to offset a medium-low rating for cost-effectiveness. Even 

with a medium-low rating on cost effectiveness, a project could not 

obtain an overall project rating of medium, based on receiving a 

33

medium or high rating on the land use plans in the region where 

the project was being built. 

The March and April 2005 Dear Colleague letters changed FTA’s 

policy, but were not implemented as a permanent change to regulation. In the Notice of Proposed Rulemaking, FTA has not only chosen to require 50 percent weight for cost effectiveness, which effectively trumps all the other project evaluation or review criteria, but 

also attempts to make it permanent law through inclusion in the 

notice. 

I hope the Committee would agree that the proposed allocation 

of weight and excessive emphasis on cost effectiveness is contrary 

to your intent when you adopted SAFETEA-LU, and I hope that 

you would agree that the incorporation of specific weighting of criteria should not be included in the final rule, but continue to be 

left to guidance documents to enable FTA to shift the allocation of 

weights as might be appropriate in the future. 

Thank you for the opportunity. 

Mr. DEFAZIO. Thank you, Mr. Townes. 

Mr. Huffer. 

Mr. HUFFER. Good morning, Mr. Chairman and Members of the 

Committee. My name is Mark Huffer. I am the General Manager 

of the Kansas City Area Transportation Authority, also known as 

KCATA, and we are the regional transit authority serving the Kansas City, Kansas-Kansas City, Missouri metropolitan area. 

While we are pleased to make comments on the NPRM today regarding the New Starts program, I am going to limit my comments 

to the Small Starts and Very Small Starts categories only, as they 

are most closely related to two recent major capital investment 

projects in the Kansas City area, one of which is already implemented and the other one is planned. 

In 2005, KCATA opened the region’s first bus rapid transit 

project known as MAX. MAX was built at a cost of approximately 

$3 million a mile and would have met all the criteria of a New 

Starts program had they been in place at that time. Since New 

Starts program was not in existence in 2002 through 2005, when 

we constructed this project, Federal funding was instead attained 

through a series of discretionary grants spread out over four Federal fiscal years. 

The uncertainty of Federal funding and the timing of the revenue 

stream presented significant challenges in making construction 

awards and phasing implementation of this project. Without a longterm Federal commitment, the scope and size of the project was 

changed numerous times. 

MAX has been an unqualified success. Ridership in the corridor 

is up over 40 percent. Thirty percent of our customers are new to 

public transit, and customer satisfaction is exceptionally high. Because of the success of this program, FTA has been very supportive 

of KCA’s effort to expand into other corridors in the community 

and, in fact, MAX has already received Federal funding commitments of $24 million under the New Starts guideline to expand into 

the Troost corridor in 2009. 

In general, we applaud the congressional decision to establish a 

separate Small Starts category for New Starts funding in 

SAFETEA-LU. This program will allow projects like ours to move 

34

quickly, allowing the community to benefit from these projects at 

a quicker pace. 

I want to comment on Small Starts right now, and that is that 

the NPRM defines a Small Starts project as one with a total project 

cost under $250 million, with 5309 funding not to exceed $75 million. While we fully support the concept of Small Starts, we are 

concerned that the proposed changes do not go far enough in 

streaming the New Starts process for projects under Small Starts 

category. The process of getting to an FTA funding decision on a 

Small Starts project still appears to be arduous and time-consuming, requiring nearly the full range of FTA New Starts criteria 

and processes. 

We believe it was Congress’s intent to enable recipients to expedite implementation of significant capital investments; yet, the 

New Starts evaluation criteria require a full alternatives analysis, 

as well as a NEPA environmental study, regardless of the nature 

of the project. These two elements are among the most burdensome 

and deliberative steps in receiving Federal funds. There is little advantage to seeking Small Starts funding as long as these requirements are not changed. 

Additionally, we believe that FTA should reconsider and clarify 

the provision that prohibits a corridor project from being divided 

into several Small Starts projects. We concur that a corridor should 

not receive several Small Starts funding for projects concurrently, 

and that projects should not be artificially segmented just to qualify as a Small Start. However, given the long lead times and high 

capital costs for implementation of major capital investment 

projects, phased implementation is a realistic approach, and the 

benefits of such approaches should be recognized. 

For example, if a metropolitan area makes a decision to build a 

20 mile corridor, it might choose to implement the system in three 

separate phases over several years. If the phasing is appropriate 

and NEPA requirements met, FTA should consider each phase for 

Small Starts funding eligibility, even though the total 20 mile line 

might otherwise qualify for New Starts. 

In regards to Very Small Starts, this has been a program that 

we believe will be beneficial to Kansas City. As a result of the less 

stringent requirements for the Very Small Starts program, we will 

be able to implement the Troost BRT-MAX corridor project within 

four years of corridor planning. We are generally supportive of 

FTA’s Very Small Starts requirements, but we believe that FTA 

should consider eliminating the local financial commitment criteria 

regarding local overmatch of Federal funds. We recognize that FTA 

will not rate any project below medium for failure to overmatch, 

but question whether it should be an evaluation criteria for 

projects of this size at all. 

Similar comments in New Starts regarding Small Starts. We believe FTA should reconsider and clarify how the requirement requiring all projects in the corridor to be considered together for 

evaluation purposes will be implemented. If multiple-phase projects 

qualify and are appropriately defined with independent utility, 

KCATA believes each phase should be independently evaluated as 

a Very Small project. 

35

We do have a concern that the $3 million per mile threshold, 

even exclusive of vehicle acquisition, will result in a modal bias toward bus projects. Further, we encourage FTA to consider raising 

that threshold or at least indexing it to allow for inflationary 

growth, because it is very possible that within several years, even 

BRT projects will not be able to be built at $3 million a mile. 

Finally, we react very favorably to the concept of the project construction grant agreement for Very Small projects. We find this to 

be a beneficial requirement that will provide the same assurance 

as a full funding agreement for much larger projects. 

We thank the Congress for your interest in this. We support the 

direction taken by Congress and FTA to streamline the New Starts 

process and encourage FTA to consider all possibilities to continue 

to make the process from beginning to end more expedited. 

Mr. DEFAZIO. Thank you, Mr. Huffer. 

Ms. Poticha, we have about seven and a half minutes to go, so 

rather than hurry through your testimony, I think we will reserve 

your testimony until after the short recess, and then we will proceed to questions. At that point, I have to go to the markup in resources and Ms. Hirono will take the chair, unless Chairman Oberstar wants to take the chair. He can always have the chair whenever he wants. 

So, with that, we will stand in recess until probably about 15 

minutes ago. Thank you. 

[Recess.] 

Ms. HIRONO. [Presiding] We are back. Good afternoon. Okay, we 

are on Ms. Poticha. Please proceed. 

Ms. POTICHA. Good afternoon, Members of the Committee. Thank 

you very much for the opportunity to appear before you today. I am 

Shelley Poticha, President of Reconnecting America, a national 

nonprofit dedicated to using transit investments to spur a new 

wave of development that improves housing affordability and 

choice, revitalizes downtowns and urban and suburban neighborhoods, and creates lasting value for our communities. 

We host the Center for Transit-Oriented Development, and 

thanks to language included by this Committee in SAFETEA-LU, 

we receive Federal funding to provide standards, guidance, and research on transit-oriented development for the 40 regions that either have or are planning new transit lines. 

As I go from region to region, it is clear that there is a thirst for 

new and increased investments in transit. First of all, transit ridership is at a 40-year high, with three-quarters of the growth coming 

from heavy, light, and commuter rail. We are finding that mayors 

value transit to help spur urban regeneration and reduce traffic 

congestion; businesses value transit because employees can get to 

work on time; and transit is viewed as a key amenity in attracting 

the highly desirable creative class to local economies Developers 

see an untapped market for housing near transit and are designing 

new products and new neighborhoods to meet this demand. And 

communities recognize that when all the pieces come together, 

transit can help improve the quality of life and lower cost of living. 

A common thread in every one of these places is the recognition 

that transit is a powerful tool that is made more powerful when 

36

combined with proactive land use an economic development strategies. 

Despite these encouraging trends, we hear frequent complaints 

about the Federal partnership. Funding for transit is not keeping 

up with demand or rising construction costs. The length of time, 

the complexity, and the added cost of trying to navigate the Federal New Starts process is increasing and placing an undue burden 

on transit projects, while high rate projects receive much less scrutiny. There is a growing concern, whether real or perceived, that 

including a full range of amenities, streetscape improvements, and 

pedestrian safety enhancements in a proposed transit project will 

jeopardize Federal funding. 

Yet, these are the very features that help maximize walking trips 

to transit and create high value urbanism. Local concern over 

meeting the cost-effectiveness index has led some communities to 

short-change the number of transit stations, rail cars, or corridor 

enhancements that would help meet or even exceed 20 year ridership projections. 

In addition, our research shows that actual ridership on many recently built transit lines is higher than predicted by FTA’s Transit 

System User Benefit or TSUB model. Some lines, such as Minnesota’s Hiawatha Light Rail and the Metro Red Line in Houston 

are outperforming their ridership estimates 15 years ahead of projections. This raises significant concerns about the substantial 

weight placed on these model results. 

The good news is that over-performing lines give transit agencies 

and communities the momentum and political capital to expand 

their transit systems to benefit more of a region, but the bad news 

is that these over-performing lines are resulting in a shortage of 

transit vehicles, parking spaces, inadequate tracking or maintenance facilities, or the inaccurate evaluation may have contributed 

to a downgrading to lower capacity technologies. Ridership numbers are the primary input into the FTA’s model to compute costeffectiveness. 

Last fall, in response to requests by FTA for specific guidance on 

how economic development could be evaluated and defined apart 

from the land use criteria, our Center for Transit-Oriented Development commissioned research on the topic; convened meetings 

with academics, practitioners, and economists; and we found that 

there are different definitions of economic development that are 

being used. 

Without congressional direction on how to interpret economic development, FTA appears to be trying to define economic development as the impact of a proposed transit investment on the regional economy; whereas, local governments and practitioners are 

trying to maximize and coordinate the transit investment to leverage and focus economic development and growth in a proposed corridor. 

We believe that there are a number of commonly used indicators 

and metrics for evaluating economic development that could be incorporated into the transit evaluation process, and they do not require the creation of a new black box model. 

The Federal New Starts and Small Starts programs sets the 

rules for engagement in how communities coordinate proposed 

37

transit investments with larger regional decisions about population 

growth and economic development. I urge you to remain steadfast 

in your intent to implement this congressional directive. We need 

a strong partner for communities that are trying to create new 

transit investments that provide residents with greater transportation choices, use transit as a development strategy, and promote 

more travel options that reduce greenhouse gas emissions. 

We cannot afford a Federal transit policy that may result in less 

transit being built or that makes it more costly and uncertain to 

obtain Federal funding. We would welcome the opportunity to work 

with FTA on these processes and rules to help create a fair economic development and land use set of evaluation processes. 

Thank you very much for the opportunity to appear before you 

today. 

Ms. HIRONO. Thank you very much to all of the panelists, and 

we will begin questioning. 

I would just like to start by asking Mr. Zimmerman, you heard 

me question Mr. Simpson regarding the directive that they issued 

in July of this year. Do you have a concern that FTA will use their 

July 20th directive, which does give weight to the cost benefit factor, that they would use that in their analysis of New Starts and 

of Small Starts pending the adoption of the new rules, which could 

take a while? 

Mr. ZIMMERMAN. Yes, that is precisely the concern. Of course, the 

way it is drawn up, the cost factors seem to work against us; the 

benefit factors work against us with things multiplied by cost—you 

know, costs including things potentially that desire expense, in any 

case, or enhancements we may make that may make the investment more valuable in the long-run; and, on the other hand, the 

benefit side not counting for some of the real reasons for making 

the investment in the first place, which the statute seem to include 

as two distinct criteria. So, you know, with the indication that that 

is the way they are going to evaluate any proposal, it leads me to 

question whether there is any point in submitting such a proposal. 

Ms. HIRONO. So pending the adoption of the new rules—and we 

hope that they will be changed to reflect the will of Congress and 

the underlying legislation—what can we do so that—I am a new 

Member of Congress, so I need to ask these questions. What can 

we do to direct the FTA to not impose these kinds of percentage 

requirements that are not in the statute? 

Mr. ZIMMERMAN. Well, it would be my hope that Congress could 

give pretty clear direction that it meant what it said, perhaps by 

some of the things that I think Ms. Poticha was suggesting, you 

know, perhaps providing a more clear definition, you know, going 

beyond what you have already done. I mean, I imagine it must be 

very frustrating, frankly. The government I work in, the management doesn’t get to not do what we put in law. But that certainly 

looks to me like what is happening here. But if you can’t get them 

to do what you already told them, perhaps you have to give them 

more specific instruction. Other than that, I am not really sure. 

Ms. HIRONO. Thank you. 

Mr. Huffer, you indicated that you basically support the direction 

of these new rules as it relates to your State and what you are 

doing there, is that correct? 

38

Mr. HUFFER. Generally for and in particularly for Very Small 

Starts program. 

Ms. HIRONO. Very Small Starts. You heard some of the other testimony that the proposal for the Very Small Starts could actually 

push a lot of jurisdictions into going in that direction so that they 

don’t have to undergo the full range of analysis and assessment. Is 

that of concern to you? 

Mr. HUFFER. Our primary concern with Very Small Starts relates 

to the cost per mile. We think that that probably prohibits streetcars and forces communities into bus rapid transit. We have two 

bus rapid transit projects, one developed that was under $3 million 

per mile, including vehicles, and one that is being developed that 

will be under $3 million excluding vehicles. But we fully believe 

that we would never be able to do even a BRT in future years with 

that $3 million threshold in there. 

Ms. HIRONO. So aside from wanting to increase that $3 million 

per mile, you don’t share the concerns expressed by I think it was 

Mr. Townes, that the new Very Small Starts would actually move 

a lot of projects into those modes of transportation that would be 

covered under——

Mr. HUFFER. Our primary concern, again, is that it would prohibit communities from proceeding with a streetcar project. But 

what we do like is that, as Administrator Simpson said, those 

projects are small enough that they pretty much automatically 

qualify for Federal funding, and you can really expedite that process at that point. But we do have issues with some of those items 

as it relates to Very Small Starts. 

Ms. HIRONO. Thank you. 

Do the Members have any questions? Mr. Boozman? 

Mr. BOOZMAN. Thank you, Madam Chair. 

Mr. Townes, congratulations on moving your Norfolk light rail 

project through the New Starts process and executing your full 

funding grant agreement next Monday, October 1st. Having just 

been through this process under the current New Starts rules, do 

you believe that any of the changes in the new proposed rule will 

make the process easier or faster than for the project sponsors? 

You are a guy that has just gone through this. Are any of the proposed changes, do you feel like that will help or speed up the process? 

Mr. TOWNES. No, sir, I don’t believe that the process, as outlined 

in the Notice of Proposed Rulemaking, will go any faster or be any 

less complicated, and I don’t think it is fair or reflects the intent 

of this Committee or Congress in terms of bringing new measures 

into the process so that the true benefits, not just the cost-effectiveness benefits, of these projects are recognized. 

Mr. BOOZMAN. Okay. Very good. 

Mr. Huffer, do you believe that a bus rapid transit project such 

as the Metro Area Express or the Troost corridor BRT generates 

transit-supportive land use and positive economic development effects? And can you give us some examples? 

Mr. HUFFER. Sure. We will say, first o fall, yes, we do believe 

that it does produce positive economic development effects and does 

help with transit corridor development, but not to the extent to 

rail. We would never believe that to be the case. 

39

But I think a good example is on our main street MAX, our first 

project that was open, the businesses in that corridor formed a 

community improvement district by which they tax themselves and 

hired additional security, additional people to clean litter control, 

just because they saw that as an advantage; they saw that MAX 

was working in the corridor, and to them it was helping to bring 

new businesses in, and they wanted to present additional face. So 

they actually tax themselves to form a CID. 

Mr. BOOZMAN. Ms. Poticha, did I get that right? 

Ms. POTICHA. Poticha. 

Mr. BOOZMAN. Good. 

Ms. POTICHA. Yes. Thanks. 

Mr. BOOZMAN. I am Boozman, Bozeman, whatever. 

[Laughter.] 

Ms. POTICHA. I can relate. 

Mr. BOOZMAN. Reconnecting America, has it looked at better 

ways to estimate and incorporate the New Starts evaluation process pedestrian use of transit? You touched on that earlier, I think, 

about pedestrian being important, to get there so you can get on 

the—can you kind of elaborate on that a little bit? 

Ms. POTICHA. Well, we have a database of every fixed transit station in the United States and we are able to pull data on how people get around in the neighborhoods that touch the transit stations, 

and what we have done is that people who live in areas within a 

half mile of a transit stop walk, bike, and take transit four times 

as much as their peers in the region. 

I think one of the challenges in the way that transit projects are 

evaluated now is that the measurement of those pedestrians is 

often lost in the computer modeling, and, in fact, although I am not 

a modeling expert, I have heard from many of the academics and 

practitioners that the current models that generate ridership are 

not sensitive to pedestrians and don’t fully measure those. 

That is part of the reason why we have been doing research on 

the tracking of projected ridership that is being generated through 

this FTA computer model and actual ridership, and what we are 

finding is that in many, many cases the ridership exceeds or is far 

accelerated beyond what is estimated by the computer model. I 

think much of this may be coming from this wave of transit-oriented development that has happened in the last 10 years around 

many, many transit stations in the United States, creating this 

whole market for neighborhoods where people can walk to transit, 

walk to services. And, yet, I think in many ways that is not being 

captured very well by the current system. 

Mr. BOOZMAN. Well, thank you all very much. I appreciate it. 

This is so important. You know, we talk about economic development; we talk about the benefit of reducing emissions, all of the 

things that we are concerned about, but also it really is important 

for single moms and single dads who don’t have the resources to 

commute. If you can’t do that, you can’t have a job, and then also 

for our seniors. You know, many of them are able to continue to 

live in their homes because they can get out and shop and do the 

things that they need to do with just a little bit of help of transportation. 

So, again, thank you all very much. 

40

Ms. HIRONO. I have a few more questions. 

Some of you may be aware, possibly not, that Honolulu is one of 

the New Starts cities, and I know that, in working with the mayor 

there on obtaining Federal funding, that it is certainly not just a 

question of cost-effectiveness, but there is a lot of discussion around 

how can we revitalize those areas that the transit stops will be in 

and economic development. Those are very real issues just because 

FTA may not have quite the models that they feel are reliable. 

I have a question for Ms. Poticha. FTA has argued that it is too 

difficult and costly to separate land use from economic development 

factors and is, thus, proposing a single combined measure of effectiveness. What are your thoughts about this approach? 

Ms. POTICHA. Well, I have been an urban planner for about 25 

years, and a vast majority of my career has been around working 

with communities who are trying to build communities around 

transit. It is very important for communities to plan the kinds of 

land uses that happen around transit to change their zoning codes 

so that mixed use walkable neighborhoods can actually be built. In 

many places, as these transit lines come in, the rules don’t allow 

those kinds of neighborhoods to be built and so there is an effort 

that needs to be done to prepare the land use policies to even allow 

these neighborhoods to be possible. 

But that is not sufficient, in my opinion, to generate the kinds 

of neighborhoods that truly capture the value that transit provides, 

and what we are seeing is the most successful places are places 

that have put in place financial tools that help support and 

incentivize development to come to these areas; that create the 

sites where development can actually happen. In many of these 

places you are running your transit line through an existing community. You might have a zoning that allows transit-oriented uses, 

but that is often prevented because the land maybe hasn’t been assembled in any real way. 

So there are a whole set of tools that can be used to work with 

the private sector to ensure that economic development happens 

and that this kind of glomeration and clustering of uses and activity truly takes place. So I would say that they are related, but they 

are different, and both are necessary in order to truly maximize the 

public’s investment in this transportation infrastructure. 

Ms. HIRONO. So would you agree that FTA is perhaps jumping 

the gun in trying to codify certain percentages that does not give 

the kind of weight that some of us would like to give to those other 

factors? 

Ms. POTICHA. Well, I have heard a lot about the challenges of 

creating a predictive computer model that would generate an estimate of economic development benefits from a particular transit investment, and I had always thought that the most appropriate way 

to evaluate transit projects was a combination of predictive models 

and some qualitative measures, because communities are very complex places. And as we are now learning when we look at these ridership models, they are not necessarily accurate. 

So I would—one of the things that we found through all of our 

research and commissioning papers from various academics and 

practitioners who work with economic development on a regular 

41

basis is that probably the best way to look at economic development is a combination of qualitative and quantitative metrics. 

Ms. HIRONO. That sounds like a yes answer to me. Yes. Thank 

you. 

Ms. POTICHA. Well, I would also say that we looked at some of 

the full funding grant agreements that have been made since 2000, 

and one of the things that is a worry to me is that there are 14 

projects on this list—which I can submit to you—that received either a low or a medium-low cost-effectiveness rating through the 

FTA’s evaluation process. And yet, when land use, which was one 

of the factors, was included into the evaluation, they rose up high 

enough in order to get funding. 

So, clearly, there is a recognition of the benefits of these other 

factors, and I would say that we should continue to do that and improve upon it. 

Ms. HIRONO. Thank you. And I would like you to submit the 14 

projects. 

Ms. POTICHA. I would be happy to. 

Ms. HIRONO. If there are no further questions, thank you. This 

hearing is adjourned. I would like to thank once again all of the 

panelists for giving us the benefit of your views. 

[Whereupon, at 1:12 p.m., the Subcommittee was adjourned.]

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