Mass Transit: FTA Needs to Provide Clear Information and Additional Guidance on the New Starts Ratings Process
Published: 2003-06-23T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Under the Transportation Equity Act for the 21 st Century (TEA-21), Congress authorized federal funding for New Starts fixed guideway transit projects--including rail and bus rapid transit projects that met certain criteria. In response to an annual mandate under TEA-21, GAO assessed the New Starts evaluation and ratings process for the fiscal year 2004 cycle, including (1) changes to the process and any related issues and (2) any challenges related to New Starts initiatives contained in the administration's fiscal year 2004 budget proposal.
section_title: What GAO Found
paragraphs: FTA made two changes to the New Starts evaluation and ratings process for the fiscal year 2004 cycle. First, in response to language contained in a conference report prepared by the House Appropriations Committee, FTA adopted a 60 percent preference policy, which in effect, generally reduced the level of New Starts federal funding share for projects from 80 percent to 60 percent. Because FTA has not revised its program regulations to reflect this change, transit agencies, project sponsors, and the public did not have an opportunity to formally comment on the change. Explicitly stating its criteria and procedures in regulation would allow those involved in considering potential projects to make their investment decisions on the basis of a transparent process. Second, FTA revised some of the criteria used in the ratings process to include a new Transportation System User Benefits measure. Project sponsors GAO interviewed said that the measure was an improvement over the previous benefits measure because it considers benefits to both new and existing transit system riders. However, many project sponsors experienced difficulties in generating a value for the measure for a number of reasons, such as problems with their local forecasting models. FTA officials are working closely with project sponsors to correct these problems, but more guidance may be necessary to avert similar difficulties in the future. The administration's fiscal year 2004 budget proposal requests that $1.5 billion be made available for New Starts for that year, a 25 percent increase over fiscal year 2003. The budget proposal contains three initiatives--reducing the federal share to 50 percent, allowing certain nonfixed guideway projects to be funded through New Starts, and establishing a streamlined ratings process for projects requesting less than $75 million in New Starts funding. These initiatives may allow FTA to fund more projects and give local communities flexibility in choosing among transit modes. However, they may also create challenges for some future transit projects, such as difficulties in generating an increased local funding share or a reduction in the number of smaller communities that will participate in New Starts.

section_title: Letter
paragraphs: Since the early 1970s, the federal government has provided a large share of  the nation’s capital investment in mass transportation. Much of this  investment has come through the Federal Transit Administration’s (FTA)  New Starts program, which awards full funding grant agreements for fixed  guideway rail, bus rapid transit, trolley, and ferry projects. A full funding  grant agreement establishes the terms and conditions for federal  participation in a project. By statute, the federal funding share of a New  Starts project cannot exceed 80 percent of its net cost. To obtain a grant  agreement, a project must progress through a regional review of  alternatives and meet a number of federal requirements, including  providing data for the New Starts evaluation and ratings process. Ongoing  and proposed New Starts projects are located in cities in every area of the  country, and collectively will transport an estimated 190 million riders  annually when completed, according to FTA. Because the demand for New  Starts funding is high, FTA was directed to prioritize projects for funding on  the basis of specific financial and project justification criteria. FTA  evaluates and rates projects on multiple criteria and determines an overall  rating for each project.
Under the Transportation Equity Act for the 21st Century (TEA-21) and  subsequent amendments, Congress authorized approximately $10 billion  for New Starts projects from fiscal years 1998 through 2003. Because TEA- 21 expires at the end of fiscal year 2003, Congress is currently considering  reauthorization legislation that will determine the amount of future funding  for the New Starts program and any changes to the program’s structure.  TEA-21 requires GAO to report each year on FTA’s processes and  procedures for evaluating, rating, and recommending New Starts projects  for federal funding. This report discusses (1) changes made to the New  Starts evaluation and ratings process for fiscal year 2004 and issues related  to these changes, (2) the number of New Starts projects that were  evaluated and rated and which projects FTA proposed for new grant  agreements in fiscal year 2004, and (3) the proposed funding commitments  and initiatives related to New Starts in the administration’s fiscal year 2004  budget proposal and any challenges they might present for future projects.
subsections: section_title: Background
paragraphs: TEA-21 authorized a total of $36 billion in “guaranteed” funding through  fiscal year 2003 for a variety of transit programs, including financial  assistance to states and localities to develop, operate, and maintain transit  systems. Under one of these programs, the New Starts program, FTA  identifies and funds worthy fixed guideway transit projects, including  heavy, light, and commuter rail, ferry, and certain bus projects (such as bus  rapid transit). FTA funds New Starts projects through full funding grant  agreements (FFGA), which establish the terms and conditions for federal  participation in a project. By statute, the federal funding share of a New  Starts project cannot exceed 80 percent of its net cost. To obtain a FFGA, a  project must progress through a regional review of alternatives and meet a  number of federal requirements, including providing data for the New  Starts evaluation and ratings process.
Projects presented to FTA for evaluation go through a lengthy process from  planning to preliminary engineering and final design, which may  culminate in a FFGA and the actual construction phase. FTA conducts  management oversight of projects from the preliminary engineering stage  through construction. All projects that do not have an existing or pending  FFGA and are in preliminary engineering or final design are considered to  be in the New Starts pipeline. There are currently 52 projects in the  pipeline. Figure 1 illustrates the overall planning and project development  process for New Starts projects.
To determine whether a project should receive federal funds, FTA’s New  Starts evaluation process assigns ratings based on a variety of financial and  project justification criteria and then assigns an overall rating. These  criteria are identified in TEA-21 and reflect a broad range of benefits and  effects of the proposed projects, such as capital and operating finance  plans, mobility improvements, and cost-effectiveness. FTA assigns  proposed projects a rating of high, medium-high, medium, low-medium,  or low for each criterion. The individual criterion ratings are combined into  the summary financial and project justification ratings. On the basis of  these two summary ratings, FTA develops the overall project rating using  the following decision rules:  Highly Recommended requires at least a medium-high for both the  financial and project justification summary ratings.
Recommended requires at least a medium for both the financial and  project justification summary ratings.
Not Recommended is assigned to projects not rated at least medium  for both the financial and project justification summary ratings.
Not Rated indicates that FTA has serious concerns about the  information submitted for the mobility improvements and cost- effectiveness criteria because the underlying assumptions used by the  project sponsor may have inaccurately represented the benefits of the  project.
Not Available is the rating given to projects that did not submit  complete data to FTA for evaluation for the fiscal year 2004 cycle.
Although many projects receive an overall rating of “recommended” or  “highly recommended,” only a few are proposed for FFGAs in a given fiscal  year. FTA proposes “recommended” or “highly recommended” projects for  FFGAs when it believes that the projects will be able to meet certain  conditions during the fiscal year that the proposals are made. These  conditions include the following:  The local contribution to funding for the project must be made available  for distribution.
The project must be in the final design phase and have progressed to the  point where uncertainties about costs, benefits, and impacts (e.g.,  environmental or financial) are minimized.
The project must meet FTA’s tests for readiness and technical capacity.
These tests confirm that there are no cost, project scope, or local  financial commitment issues remaining.
section_title: Changes to the New Starts Process for Fiscal Year 2004 Have Caused Difficulties for Some Project Sponsors
paragraphs: FTA implemented two changes to the New Starts process for fiscal year  2004. First, in response to language contained in a conference report  prepared by the House Appropriations Committee, FTA instituted a  preference policy in its ratings process favoring current and future projects  that do not request more than a 60 percent federal share. Second, FTA  revised its cost-effectiveness and mobility improvements criteria by  adopting a Transportation System User Benefits (TSUB) measure that gives  equal weight to benefits for both new and existing transit system riders.  Project sponsors we interviewed endorsed the TSUB measure, but  implementing it has been difficult for both FTA and the project sponsors  because of the variety of local travel forecasting models that exist and  problems with those models. These difficulties resulted in some projects  not being rated for the fiscal year 2004 cycle.
subsections: section_title: FTA Made Two Changes to the New Starts Process for Fiscal Year 2004
paragraphs: The New Starts evaluation and ratings process for fiscal year 2004 was  generally similar to that of fiscal year 2003, but FTA implemented two  changes that are described in its Annual Report on New Starts for Fiscal  Year 2004. First, in response to language contained in a conference report  prepared by the House Appropriations Committee, FTA instituted a  preference policy in its ratings process favoring current and future projects  that do not request more than a 60 percent federal share. To achieve this,  FTA changed its criterion related to capital finance plans to give projects  seeking a federal share greater than 60 percent a “low” financial rating. A  “low” financial rating is likely to result in a “not recommended” overall  rating. Second, FTA changed the calculation of the cost-effectiveness and  mobility improvements criteria by adopting the TSUB measure. The TSUB  measure replaced the “cost per new rider” measure that had been used in  past ratings cycles. According to FTA, the new TSUB measure reflects an  important goal of any major transportation investment—reducing the  amount of travel time and out-of-pocket costs that people incur for taking a  trip (i.e., the cost of mobility). In contrast to the previous “cost per new  rider” measure, the TSUB measure gives equal weight to both new and  existing transit system riders by measuring not only the benefits to people  who change transportation modes (e.g., highways to transit) but also  benefits to existing transit riders and highway users.
Figure 2 illustrates the New Starts evaluation and ratings process, including  the changes made to the process for fiscal year 2004.
section_title: FTA Regulations Do Not Reflect Its Current Preference Policy Favoring Projects with a Federal Funding Share That Does Not Exceed 60 Percent of Total Project Funding
paragraphs: The TEA-21 legislation that authorizes the New Starts program states that  federal grants are to be made “for 80 percent of the net project cost, unless  the grant recipient requests a lower grant percentage.” The legislation  further provides that, in evaluating grant applications, FTA shall consider  the degree of local financial commitment and the extent to which the local  commitment exceeds the minimum nonfederal share of 20 percent. For the  fiscal year 2004 cycle, FTA instituted a 60 percent preference policy that  ultimately is likely to result in an overall rating of “not recommended” for  projects that seek more than a 60 percent federal share.
Although TEA-21 authorized FTA to consider local financial commitments  that increase the local share of net project cost, and it vested FTA with  discretion as to how to achieve this, the Secretary of Transportation is  required by law to issue regulations defining the manner in which projects  will be evaluated and rated. In December 2000, FTA finalized a regulation  that stated that the evaluation and ratings process would consider, among  other things, the extent to which projects have a local financial  commitment that exceeds the 20 percent minimum. Essentially, this  regulation merely restated the TEA-21 statutory criteria. Also, when FTA  implemented its 60 percent preference policy, it did not amend its  regulations to support the change in policy or its current procedures. By  not amending its regulations, which have the full force and effect of law, to  reflect this change, FTA has not provided an opportunity for public  comment on its new policy. Furthermore, explicitly stating all of FTA’s  criteria and procedures in regulations would help to ensure that project  sponsors, Metropolitan Planning Organizations, and others involved in  considering potential New Starts projects were fully aware of FTA’s  preference policy and could make their investment decisions on the basis  of a transparent evaluation and ratings process.
FTA has stated that in instituting the 60 percent preference policy, it was  following congressional direction as expressed in a conference report  prepared by the House Appropriations Committee. That report states “the  conferees direct FTA not to sign any new full funding grant agreements  after September 30, 2002, that have a maximum federal share of higher than  60 percent.” As stated previously, TEA-21 provides FTA with discretion to  give priority to projects that have a federal share lower than 80 percent.  FTA officials told us that favoring projects with a federal share that does  not exceed 60 percent would allow more projects to receive New Starts  funding and would help ensure that local governments play a major role in  funding such projects.
section_title: Reduction in Federal Share Affected Some Ongoing New Starts Projects and May Adversely Affect Future Projects
paragraphs: Of the 32 projects that were rated for the fiscal year 2004 cycle, 4 received a  “low” financial rating and a “not recommended” overall rating because,  among other reasons, they proposed a federal share above 60 percent.  According to FTA, since the release of FTA’s Annual Report in February  2003, one of these projects—the San Juan Tren Urbano Minillas Extension  project—was withdrawn and the three remaining projects are continuing to  address their financial issues. FTA officials expressed the view that  reducing the level of federal share to 60 percent has a minimal impact  because, over the last 10 years, the federal share for New Starts projects’  grant agreements has averaged around 50 percent and has been trending  lower. However, many of the project sponsors we interviewed (7 of the 11)  noted that the reduced federal share did, in fact, have an impact on their  projects’ schedule and financing, which had to be revised prior to or during  the ratings process.
FTA’s decision to institute its preference policy for projects that seek no  more than a 60 percent federal share may also adversely affect future  projects, according to project sponsors that we interviewed, as the  following examples illustrate.
Six of the 11 project sponsors said that continuing a 60 percent  preference policy for the amount of the federal share for projects might  reduce the number of future projects because of difficulties faced by  local and state governments in providing an increased local share.  Transit industry officials we interviewed agreed with this statement.
Nine of the 11 project sponsors said that the unequal federal share for  highway and transit projects could bias the local decision-making  process in favor of highway projects. Highway projects generally receive  a federal share of 80 percent or more, in contrast to the current  preference policy of a 60 percent federal share for New Starts transit  projects.
section_title: FTA’s New Cost- effectiveness Criterion Was Endorsed by Project Sponsors but Resulted in Some Implementation Difficulties
paragraphs: The nine project sponsors we interviewed who were affected by the TSUB  measure believed it was an improvement over the previous “cost per new  rider” measure because the TSUB measure takes into account a broader set  of costs and benefits to the overall transit system. For example, the  measure considers mobility benefits related to improved travel time for all  users of a transportation corridor, rather than benefits accruing from only  new riders. However, many project sponsors encountered difficulties in  providing accurate data needed to calculate the new TSUB measure.
To implement the TSUB measure, FTA developed a software package,  called Summit, to extract certain data from local travel forecasting models  that are used in planning transit projects. FTA hired contractors to assist  project sponsors in using the Summit software to calculate the TSUB value.  During the implementation process, FTA discovered that many of the local  travel forecasting models had underlying errors. Some of these errors were  significant due to faulty design and assumptions made in some of the local  travel forecasting models; others were simple coding errors in the models.  As a result, many projects experienced difficulties that prevented them  from calculating an acceptable value for the TSUB measure.
According to FTA’s Annual Report, 11 of the 32 projects rated for the fiscal  year 2004 cycle were identified as being unable to calculate a valid TSUB  value. As a result, these projects were “not rated” for the cost- effectiveness criterion. Additionally, 7 of the 9 project sponsors we  interviewed who were affected by the TSUB measure encountered  difficulties in the measure’s implementation:  5 had difficulty getting their local transit forecasting models to generate  the data needed for FTA’s software to calculate the measure,  3 did not have adequate data to develop the measure, and  2 said that FTA did not provide enough documentation about the  measure and the software used to calculate the TSUB.
As described above, FTA officials told us that they believe the major  problem in implementing the TSUB measure stemmed from problems with  the underlying local travel forecasting models, not FTA’s software or  guidance on the measure. Nonetheless, FTA is taking some steps to address  the problems raised in the implementation of the TSUB measure. For  example, FTA hired contractors to work with transit sponsors to correct  problems with the local travel forecasting models and the software used to  calculate the TSUB measure. These contractors provided technical support  to all affected project sponsors and assisted some sponsors in correcting  the underlying problems identified in their local travel forecasting models.  FTA officials also told us that they are continuing to work closely with the  11 project sponsors who were unable to calculate values for the TSUB  measure. When the problems in the projects’ local travel forecasting  models are corrected and data are resubmitted to FTA for evaluation, FTA  plans to re-rate these projects. As soon as a project receives a revised  rating, FTA officials told us that they would inform Congress and other  appropriate parties.
Project sponsors we interviewed told us that they would have benefited  from additional guidance and other technical support, such as  documentation for the software used to calculate the TSUB measure. They  also requested additional opportunities to discuss their concerns and  provide input to FTA officials about the measure. FTA officials told us that  they are developing software documentation for the TSUB measure and  plan to release it in June 2003. Furthermore, FTA has held a series of four  roundtable discussions with project sponsors and transit industry officials,  specifically on the TSUB measure and its implementation. FTA plans to  hold two additional roundtable discussions during fiscal year 2004.
FTA officials and a FTA consultant told us that they anticipate that fewer  projects will have difficulties calculating accurate TSUB values in future  New Starts evaluation and ratings cycles. FTA plans to continue addressing  technical problems related to inaccurate local travel forecasting models on  a case-by-case basis. FTA officials also acknowledged the need to develop a  more systematic approach for dealing with these problems.
section_title: FTA Evaluated 52 Projects for the Fiscal Year 2004 Cycle, Rated 32, and Proposed 4 for New Grant Agreements
paragraphs: Of the 52 projects FTA evaluated for the fiscal year 2004 cycle, 32 were  rated and 20 were statutorily exempt from the ratings process because they  requested less than $25 million in New Starts funding. Figure 3 shows the  results of the process for the fiscal year 2004 cycle and how they compare  with those of fiscal year 2003, when 50 projects were evaluated. From fiscal  years 2003 to 2004, the number of “recommended” projects decreased from  25 to 12, while the number of projects that received a rating of “not  recommended” rose from 4 to 11. The primary reasons for these changes  were (1) lower financial ratings, which resulted from the inability of some  projects to conform to the reduced federal share, and (2) “low” ratings  received on the cost-effectiveness and mobility improvements criteria  resulting from implementation of the new TSUB measure. In addition, the  number of projects that were “not rated” or “not available” rose from 2 to 7,  largely due to difficulties project sponsors had in determining a value for  the TSUB measure.
Following the fiscal year 2004 New Starts evaluation and ratings process,  FTA proposed four projects for new federal funding commitments.  Inclusion of one of them—the Chicago Ravenswood Line Expansion  project—is unusual because FTA assigned it an overall project rating of  “not rated” even though, on the basis of FTA’s New Starts regulations, a  project must have an overall rating of at least “recommended” to receive a  grant agreement. According to FTA officials, this project could not be rated  because its local travel forecasting data and models did not support  calculation of the new benefits measure. However, the officials told us that  they decided to select this project for a proposed grant agreement because  they believed that the data problems would be corrected, and the project  would be able to achieve a “recommended” rating. Along with the other  three proposed projects, FTA officials believe that the Chicago  Ravenswood Line Expansion project will be ready for a grant agreement by  the end of fiscal year 2004. Officials said that other projects that received  overall ratings of “recommended” or “highly recommended” would not be  ready at that time. Figure 4 summarizes the ratings of the four proposed  projects, which are further described in appendix I.
section_title: Proposed Initiatives in FTA’s Fiscal Year 2004 Budget Proposal Have Some Advantages, but May Create Challenges for Future New Starts Projects
paragraphs: The administration’s fiscal year 2004 budget proposal requests that  $1.5 billion be made available for New Starts, a $0.3 billion increase over  the fiscal year 2003 level. The budget proposal also contains three  initiatives—reducing the federal share to 50 percent, allowing nonfixed  guideway projects to be funded through New Starts, and replacing the  “exempt” classification with a streamlined ratings process for projects  requesting less than $75 million in New Starts funding.
subsections: section_title: Administration’s Proposed Fiscal Year 2004 Budget Requests 25 Percent Increase in New Starts Funding
paragraphs: The administration’s budget proposal for fiscal year 2004 requests that  $1.5 billion be made available for the construction of new transit systems  and expansion of existing systems through the New Starts program—an  increase of $0.3 billion, or 25 percent over the $1.2 billion appropriated for  fiscal year 2003. The commitment authority for fiscal year 2004 and beyond  will be addressed in the next surface transportation authorization  legislation. Because FTA’s fiscal year 2004 budget proposes that  $1.5 billion in commitments be made available for the New Starts program,  FTA expects that the new commitment authority adopted in the  authorization legislation will, at a minimum, be sufficient to cover this  amount.
Figure 5 illustrates the specific allocations FTA has requested for fiscal year  2004. It shows that  $1.08 billion would be allocated among 21 projects with existing grant   $235 million would be allocated among the 4 projects proposed for new  FFGAs;  $121.2 million would be allocated among other projects in final design  and preliminary engineering that do not have existing, pending, or  proposed FFGAs (these projects may include those designated by  Congress);  $55 million would be allocated to 1 project with a pending grant  agreement (i.e., the FFGA was proposed in an earlier year, but has not  yet been completed); and  the remainder of the funds would be allocated to other mandated  projects and oversight activities.
section_title: Proposed Initiatives in FTA’s Fiscal Year 2004 Budget Proposal Have Advantages and Disadvantages
paragraphs: The administration has proposed that the federal share of New Starts  project costs be reduced from the current statutory maximum level of 80  percent to a statutory maximum of 50 percent. The possible advantages of  this proposed reduction would be similar to those cited by FTA officials as  justification for the 60 percent preference policy—that is, the change may  allow FTA to fund additional projects and the local governments  sponsoring the projects would be encouraged to provide a greater degree  of financial commitment. However, a reduction in the federal share may  adversely affect some future projects. Nine of the 11 project sponsors we  interviewed were opposed to a reduction of the federal share for projects  from the current statutory level of 80 percent to 50 percent. These sponsors  said that a reduced federal share may make it more difficult for  communities to participate in the New Starts program because they will  have to provide an increased local share. It may also affect local decision  making because it would make the federal share for transit projects higher  than that required for most highway projects, which generally receive a  federal share of 80 percent or more. We reported in 2002 that a number of  the nation’s leading transportation experts had suggested that federal  matching requirements should be equal for all transportation modes to  avoid creating incentives for local decision makers to pursue projects in  one mode that might be less effective than projects in other modes.  However, as we noted earlier, over the past 10 years requests for federal  assistance for New Starts projects have averaged around 50 percent and  have been trending lower.
Another initiative proposed in the administration’s fiscal year 2004 budget  proposal would allow certain nonfixed guideway transit projects (e.g.,  regular or express bus service) to be eligible for New Starts funding.  Currently, New Starts projects are exclusively on fixed guideways and  occupy a separate right-of-way. According to FTA, the proposal would  allow project sponsors to choose the most appropriate mode to serve  specific corridors. Three of the 11 project sponsors we interviewed  supported the initiative because they believed that it gives local  communities greater flexibility when choosing types of transit projects.
Seven of the 11 project sponsors we interviewed questioned the need for  allowing nonfixed guideway projects into the New Starts process. They  were concerned that there would be less emphasis on traditional fixed  guideway New Starts projects. Transit industry officials we interviewed  shared this concern.
Finally, the administration has proposed replacing the “exempt”  classification with a streamlined ratings process for projects requesting  less than $75 million in New Starts funding. Currently, projects seeking less  than $25 million in New Starts funding are exempt from the ratings process  and are not evaluated on the same project justification criteria as projects  requesting more than $25 million. By eliminating the “exempt”  classification and replacing it with a streamlined ratings process for  projects requesting less than $75 million, FTA would ensure that all  projects receive a rating and are evaluated on the basis of the same criteria.  This is a hallmark of performance-oriented evaluation. However, 6 of 11  project sponsors we interviewed opposed eliminating the “exempt”  classification. These project sponsors believed that elimination of the  “exempt” classification would reduce the number of funding applications  from smaller cities because of the cost and time involved in providing the  full evaluation data.
Figure 6 summarizes the advantages and disadvantages of the three  proposed initiatives in the administration’s fiscal year 2004 budget  proposal, as expressed by FTA officials and project sponsors we  interviewed.
section_title: Conclusions
paragraphs: Although FTA has the authority to favorably rate proposed projects that  request a lower federal share, it also has a responsibility to fully inform all  transit agencies of changes that are made to the evaluation and ratings  process. Because FTA has not revised its regulations to reflect its 60  percent preference policy, transit sponsors, other members of the transit  community, and the public may not be fully aware of FTA’s preference  policy and have not had the opportunity to formally comment on it. By  revising its regulations to reflect its current policy, FTA would have the  opportunity to obtain public comments on its proposed rulemaking, thus  increasing the transparency of the agency’s decision-making process and  ensuring that the views of affected transit agencies and other interested  parties are considered in that process.
In its implementation of the Transportation System User Benefits measure,  FTA discovered that many local travel forecasting models used by project  sponsors in planning New Starts projects were flawed or had difficulty  generating the required data. FTA officials considered this to be a major  problem and they acknowledged the need for a more systematic way to  address the problem across all transit agencies that are current or future  New Starts project sponsors. FTA has assisted project sponsors on a case- by-case basis and plans to do so in the future. Additional guidance from  FTA on what specific information is required from local travel forecasting  models could help transit agencies generate accurate data for the measure.
section_title: Recommendations for Executive Action
paragraphs: To ensure that the New Starts regulations reflect FTA’s actual evaluation  and ratings process and procedures, the Secretary of Transportation should  direct the Administrator, FTA, to amend the agency’s regulations governing  the level of federal funding share for projects to reflect its current policy.
To systematically address the problems with the implementation of the  Transportation System User Benefits measure, the Secretary of  Transportation should direct the Administrator, FTA, to issue additional  guidance to transit agencies describing FTA’s expectations regarding the  local travel forecasting models and the specific type of data FTA requires to  calculate the measure.
section_title: Agency Comments
paragraphs: We obtained oral comments on a draft of this report from the Department  of Transportation. Department officials generally agreed with the  information presented in the report and they provided technical  clarifications, which we incorporated as appropriate. They concurred with  the recommendation about providing guidance on the user benefits  measure and said that they will consider the recommendation about  amending the regulations related to federal funding share.
section_title: Scope and Methodology
paragraphs: To describe the changes in the New Starts process, we analyzed  information in FTA’s Annual Report on New Starts for Fiscal Year 2004. To  identify any issues related to those changes, we interviewed  FTA officials and contractors hired by FTA to implement those changes;  11 of the 52 sponsors of fixed guideway transit projects being  considered for New Starts funding in fiscal year 2004; Metropolitan Planning Organization (MPO) officials involved in 5 of the  projects whose sponsors we interviewed; and  transit industry officials, including senior officials at the American  Public Transportation Association and the Chair of the New Starts  Working Group—an organization of New Starts project sponsors, MPOs,  and private transit industry firms, who advocate improvements to the  New Starts evaluation and ratings process.
To determine how many New Starts projects were evaluated, rated, and  proposed for funding in fiscal year 2004, we analyzed information in FTA’s  Annual Report and in various budget and financial documents prepared by  FTA. To identify proposed funding commitments and initiatives related to  New Starts in the administration’s fiscal year 2004 budget proposal—and  the challenges they might present for future projects—we reviewed  pertinent FTA documents, including its Annual Report and proposed  budget, and we interviewed a wide variety of officials affected by the  changes. These included the individuals listed above (FTA officials, project  sponsors, MPO officials, and transit industry representatives). We  conducted our review from March 2003 through June 2003 in accordance  with generally accepted government auditing standards.
We are sending copies of this report to congressional committees with  responsibilities for transit issues; the Secretary of Transportation; the  Administrator, Federal Transit Administration; and the Director, Office of  Management and Budget. We will also make copies available to others  upon request. In addition, this report will be available at no charge on our  Web site at http://www.gao.gov.
If you or your staffs have any questions on matters discussed in this report,  please contact me at siggerudk@gao.gov. An additional key GAO contact  and contributors to this report are listed in appendix III.
section_title: Additional Information on Four Projects Proposed for New Full Funding Grant Agreements in Fiscal Year 2004
subsections: section_title: Chicago Ravenswood Line Expansion Project
paragraphs: The Chicago Transit Authority (CTA) is planning a series of capital  improvements to enhance the operation of the Ravenswood heavy rail  line, which currently experiences capacity problems through a high- density 9.3-mile corridor.
The Ravenswood Line Expansion Project would allow CTA to expand  platforms and stations along the existing line to accommodate longer  trains.
The overall capital cost of the project is estimated at $529.9 million. The  federal share requested is $245.5 million (46 percent).
At present, this project has been identified as “not rated” due to  concerns about some of the information underlying the calculation of  the Transportation System User Benefits (TSUB) measure. However, on  the basis of work conducted to date, the Federal Transit Administration  (FTA) believes that the remaining issues will be resolved in the near  future and that an overall project rating of “recommended” is likely to be  granted.
section_title: Las Vegas Resort Corridor Project
paragraphs: The Las Vegas Regional Transportation Commission (RTC) is proposing  a 2.28-mile Resort Corridor Automated Guideway Transit (elevated  monorail) project.
The monorail will serve the Las Vegas central business district and the  resort corridor along the Las Vegas “strip.”
The estimated capital cost for the project is $324.8 million. RTC is  seeking $159.7 million (50 percent) in New Starts funding.
The Las Vegas Resort Corridor Project received a “high” rating for cost- effectiveness, as demonstrated by its high transit system user benefits.
section_title: New York East Side Access Project
paragraphs: The New York Metropolitan Transit Authority (MTA) is designing a  direct access for Long Island Rail Road (LIRR) passengers to a new  passenger concourse in Grand Central Station in Midtown Manhattan.
The 4-mile, two-station commuter rail extension under the East River  will contribute to the overall growth of the nation’s largest commuter  rail system.
The projected capital cost of the project is $5.3 billion. MTA is  requesting $2.6 billion (49 percent) in New Starts funding.
LIRR has 162,000 daily riders, and this project will allow them to access  the east side of New York by connecting LIRR with Grand Central  Station. FTA officials believe that the project will reduce travel time for  many riders.
section_title: Seattle Central Link Project
paragraphs: The Central Puget Sound Regional Transit Authority (Sound Transit) is  proposing a 24-mile Central Link light rail transit line from central  Seattle toward, but not connecting to, the Seattle-Tacoma airport.
The total capital cost for the project is estimated at $2.5 billion. Sound  Transit is expected to seek $500 million (20 percent) in New Starts  funding.
The Central Link project entered Preliminary Engineering in July 1997  and Final Design in February 2000. FTA originally entered into a full  funding grant agreement for the “Seattle Sound Move Corridor” project  in January 2001.
Congress and the Department of Transportation’s Office of the Inspector  General raised significant questions about the project costs and directed  Sound Transit to reexamine the entire project to reduce risks and better  meet budget limitations. Sound Transit identified the Central Link  component of the larger Seattle Sound Move Corridor project as its new  minimum operable segment.
section_title: Transit Sponsors and Metropolitan Planning Organizations Contacted by GAO
subsections: section_title: Cleveland (Euclid Corridor Bus Rapid Transit)
paragraphs: Las Vegas (Resort Corridor Fixed Guideway)
New York (Long Island Railroad Eastside Access)
Pittsburgh (North Shore Connector Light Rail Transit)
San Francisco (New Central Subway Project)
Washington, D.C. (Dulles Corridor Bus Rapid Transit)
section_title: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
section_title: Acknowledgments
paragraphs: In addition to the person named above, other key contributors to this  report were Alan Belkin, Christine Bonham, R. Stockton Butler, Brandon  Haller, Bert Japikse, Ryan Petitte, and David Laverny-Rafter.
section_title: GAO’s Mission
paragraphs: The General Accounting Office, the audit, evaluation and investigative arm of  Congress, exists to support Congress in meeting its constitutional responsibilities  and to help improve the performance and accountability of the federal government  for the American people. GAO examines the use of public funds; evaluates federal  programs and policies; and provides analyses, recommendations, and other  assistance to help Congress make informed oversight, policy, and funding  decisions. GAO’s commitment to good government is reflected in its core values of  accountability, integrity, and reliability.
section_title: Obtaining Copies of GAO Reports and Testimony
paragraphs: The fastest and easiest way to obtain copies of GAO documents at no cost is  through the Internet. GAO’s Web site (www.gao.gov) contains abstracts and full- text files of current reports and testimony and an expanding archive of older  products. The Web site features a search engine to help you locate documents  using key words and phrases. You can print these documents in their entirety,  including charts and other graphics.
Each day, GAO issues a list of newly released reports, testimony, and  correspondence. GAO posts this list, known as “Today’s Reports,” on its Web site  daily. The list contains links to the full-text document files. To have GAO e-mail this  list to you every afternoon, go to www.gao.gov and select “Subscribe to GAO  Mailing Lists” under “Order GAO Products” heading.
subsections: section_title: Order by Mail or Phone
section_title: To Report Fraud, Waste, and Abuse in Federal Programs
section_title: Public Affairs