Public Transit: Observations on Recent Changes to the Capital Investment Grant Program
Released: 2016-04-28T00:00:00


Highlights: section_title: Why GAO Did This Study
paragraphs: FTA's Capital Investment Grant program provides roughly $2 billion in appropriated funds each year to help states, cities, and localities plan and build new or extensions to existing fixed-guideway transit systems. Under this program, project sponsors—usually local transit agencies—have typically applied for their projects to receive federal funding as either a New Starts or a Small Starts project. In 2012, MAP-21 created a new category of eligible projects called Core Capacity Improvement projects and also revised the process proposed projects must follow to be eligible for and receive federal funding.

MAP-21 included a provision for GAO to biennially review FTA's and the Department of Transportation's implementation of this program. This report discusses: (1) FTA's progress in implementing changes to the program required by MAP-21 and (2) how selected project sponsors view the MAP-21 changes and FTA's implementation of those changes. To conduct this review, GAO reviewed the relevant provisions of pertinent laws and FTA's policy guidance, interviewed FTA officials and representatives from 13 project sponsors representing 17 of 52 projects participating in the program, and visited the sites of two Core Capacity Improvement projects. Project sponsors and locations visited were selected based on previous experience in the program, among other things.

In written comments, DOT emphasized its commitment to improve and streamline the Capital Investment Grant program.

section_title: What GAO Found
paragraphs: The Federal Transit Administration (FTA) has implemented most of the key changes the Moving Ahead for Progress in the 21st Act (MAP-21) made to the Capital Investment Grant program, which helps fund investments in new public transit systems or extensions to existing systems. Projects funded under this program fall into different categories, depending on the total project's cost and the amount of federal funding requested. For example, under MAP-21, New Starts projects had capital costs that were $250 million or greater while Small Starts projects had capital costs that were less than $250 million. As required by MAP-21, FTA has issued guidance outlining the new review and evaluation process for New Starts and Small Starts projects—as well as Core Capacity Improvement projects, which is a new category of eligible projects MAP-21 created and which are designed to increase the capacity of an existing system. In addition, FTA has informed project sponsors how they can pre-qualify for a satisfactory rating based on the characteristics of their projects. FTA officials said they plan to address the remaining requirements, such as completing the rulemaking to fully implement the MAP-21 provisions, over the next 2 years.

The 13 project sponsors GAO contacted—representing 7 New Starts projects, 8 Small Starts projects, and 2 Core Capacity Improvement projects—were generally supportive of the changes MAP-21 made to the Capital Investment Grant program, as well as FTA's implementation of the changes.

Representatives from 9 of 13 project sponsors indicated that the MAP-21 changes streamlined the Capital Investment Grant program's project development process, such as by reducing the number of time-consuming FTA reviews.

Of the three project sponsors that indicated they had an opinion on the addition of Core Capacity Improvement projects as a new category of projects, all were supportive, with representatives from one noting, for example, that this change gives them options to increase the capacity of existing systems as ridership increases. Such projects could include lengthening rail platforms to accommodate additional train cars or to reduce platform overcrowding.

Also, representatives from 11 of 13 project sponsors supported FTA's implementation efforts, noting, for example, that FTA has taken steps to listen to and incorporate many of the recommendations offered by project sponsors in implementing the MAP-21 changes.

While project sponsors raised some concerns about the potential impact certain changes—such as limiting the amount of time New Starts and Core Capacity Improvement projects can spend in Project Development—might have on project sponsors in the future, they also acknowledged that not all the MAP-21 changes have been implemented yet. While participation in the program has increased substantially—by 70 percent—since the enactment of MAP-21, both project sponsors and FTA officials pointed out that it is too early to tell what impact the changes will ultimately have on the Capital Investment Grant program—including if the changes will help expedite projects through the program.

section_title: Letter
paragraphs: The federal government provides a large share of the nation’s capital  investment in public transit systems through the Federal Transit  Administration’s (FTA) Capital Investment Grant program, which is a  discretionary and competitive grant program that provides roughly $2  billion in appropriated funds each year to help states, cities, and localities  plan and build new fixed-guideway systems or extensions to existing  fixed-guideway systems. Within the Capital Investment Grant program,  project sponsors—usually local transit agencies—have typically applied  for their projects to receive federal funding as either a New Starts or a  Small Starts project. In 2012, the Moving Ahead for Progress in the 21st  Century Act (MAP-21) established a new category of eligible projects  called Core Capacity Improvement projects, which are substantial  corridor-based capital investments in existing fixed-guideway systems  that increase the capacity of a corridor by not less than 10 percent. MAP- 21 also outlined a revised process that all proposed projects in the Capital  Investment Grant program must follow to be eligible for and receive  federal funding.

MAP-21 included a provision for us to biennially review FTA’s processes  and procedures for evaluating and rating proposed fixed-guideway capital  projects and Core Capacity Improvement projects and recommending  them for funding and the Department of Transportation’s (DOT)  implementation of such processes and procedures. This report  discusses: (1) FTA’s progress in implementing changes to the Capital  Investment Grant program required by MAP-21 and (2) selected project  sponsors’ views of the MAP-21 changes and FTA’s implementation of  those changes.

In conducting our review, we focused our work on selected statutory  requirements contained in MAP-21 that were not significantly altered or  repealed by the Fixing America’s Surface Transportation Act (FAST Act).  To address our objectives, we reviewed the relevant provisions of MAP- 21, the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A  Legacy for Users (SAFETEA-LU), and the FAST Act. We also reviewed  FTA’s policy guidance; other pertinent FTA documents, such as FTA’s  annual reports to Congress; and our body of work on the Capital  Investment Grant program. In addition, we interviewed FTA officials,  representatives of the American Public Transportation Association  (APTA), and 13 project sponsors representing 17 selected projects  participating in the program as of February 2015. The project sponsors  we contacted represent 7 New Starts projects, 8 Small Starts projects,  and 2 Core Capacity Improvement projects. They also represent different  rail modes (heavy rail, light rail, commuter rail) as well as both bus rapid  transit and streetcar projects. The information obtained from these  interviews is not generalizable to all project sponsors but provides insight  into project sponsors’ views of the MAP-21 changes thus far. As part of  our work, we also visited the two selected Core Capacity Improvement  projects—in New York City and Dallas, Texas—because the addition of  these types of projects was a significant change to the program under  MAP-21. The project sponsors we contacted and the locations we visited  were selected based on a number of factors, the primary being previous  project experience in FTA’s Capital Investment Grant program under  SAFETEA-LU, which provided a basis to compare changes made by  MAP-21. Appendix I contains additional information on our objectives,  scope, and methodology.

We conducted this performance audit from July 2015 to April 2016 in  accordance with generally accepted government auditing standards.  Those standards require that we plan and perform the audit to obtain  sufficient, appropriate evidence to provide a reasonable basis for our  findings and conclusions based on our audit objectives. We believe that  the evidence obtained provides a reasonable basis for our findings and  conclusions based on our audit objectives.
subsections: section_title: Background
paragraphs: FTA’s primary source of funding for new fixed-guideway projects or  extensions to existing fixed-guideway systems is the Capital Investment  Grant program, which is a discretionary program funded from annual  appropriations rather than the Highway Trust Fund. Over the past 10  fiscal years, FTA has provided states, cities, and other localities with  almost $18 billion in federal funding to plan and build new projects  through this program. Projects eligible to compete for federal funding  under the Capital Investment Grant program include:

Commuter rail—systems that operate along electric or diesel- propelled railways and provide train service for local, short distance  trips between a central city and adjacent suburbs.

Heavy rail—systems that operate on electric railways with high- volume traffic capacity and are characterized by separated right-of- way, sophisticated signaling, high platform loading, and high-speed,  rapid-acceleration rail cars operating singly or in multi-car trains on  fixed rails.

Light rail—systems that operate on electric railways with light-volume  traffic capacity and are characterized by shared or exclusive rights-of- way, or low or high-platform-loading, single or double-car trains, and  overhead electric lines that power rail vehicles.

Streetcars—systems that are similar to light rail, but distinguishable  because they are usually smaller and designed for shorter routes,  more frequent stops, and lower travel speeds.

Bus rapid transit—systems in which the majority operates in a  separated right-of-way during peak periods and includes features that  emulate the services provided by rail transit, such as defined stations,  traffic signal priority, short headway bidirectional services for a  substantial part of weekdays and weekend days, pre-board ticketing,  platform-level boarding, and separate branding. Fixed-guideway bus  rapid transit systems may include portions of service that are non- fixed guideway. In addition, bus rapid transit can also include corridor- based bus rapid transit projects, which have similar characteristics as  fixed-guideway systems, but the majority of the project does not  operate in a separated right-of-way dedicated for public transportation  use during peak periods.

Ferries—systems comprised of vessels that operate over a body of  water and are generally steam or diesel powered.

These projects are designed and implemented by project sponsors, which  are usually local transit agencies, often in coordination with local  metropolitan-planning organizations. Within the Capital Investment  Grant program, project sponsors have typically applied for funding as  either a New Starts or a Small Starts project. Under MAP-21, New Starts  projects include new fixed-guideway projects, extensions to fixed- guideway projects, and fixed-guideway bus rapid transit projects that  have a total capital cost of $250 million or greater or a Capital Investment  Grant program contribution of $75 million or greater. Small Starts projects  include new fixed-guideway projects, extensions to fixed-guideway  projects, and both fixed-guideway and corridor-based bus rapid transit  projects that have a total net capital cost less than $250 million and a  Capital Investment Grant program contribution less than $75 million.

Prior to the enactment of MAP-21, the Capital Investment Grant program  was governed by statutory provisions put in place under SAFETEA-LU.  MAP-21, which was enacted in July 2012, made numerous changes to  the program. For example, MAP-21 reduced the number of phases in the  process that projects must follow to be eligible for and receive federal  funding. Under SAFETEA-LU, project sponsors were required to identify  the transportation needs of a specific corridor and evaluate a range of  alternatives to address locally identified problems in that corridor during  what was called the alternatives analysis phase. To complete this  phase, project sponsors selected a locally preferred alternative to be  advanced for further development after costs, benefits, and impacts of  each alternative were analyzed. However, under MAP-21 the process  relies on the review of alternatives performed during the metropolitan  transportation planning and the National Environmental Policy Act of 1969  (NEPA) environmental review processes. In addition, MAP-21 created a  new category of eligible projects called Core Capacity Improvement  projects, which are substantial corridor-based capital investments in  existing fixed-guideway systems that increase the capacity of a corridor  by at least 10 percent in a corridor that is at or above capacity today or is  expected to be within 5 years. Core Capacity Improvement projects can  include expanding system platforms, the acquisition of real property,  rights-of-way, and rolling stock associated with increasing capacity,  among other things, and cannot include elements to improve general  station facilities, parking, or elements designed to maintain a state of  good repair.

Under MAP-21, any project that fits the definition of a new fixed-guideway  project or an extension to an existing fixed-guideway system is eligible to  compete for federal funding under the Capital Investment Grant program.  Once a project sponsor decides to seek Capital Investment Grant  program funding it submits an application to FTA consisting of information  on the proposed project, such as a description of the transportation  problem the project is seeking to address, among other requirements. If  accepted into the program, the process that project sponsors must follow  varies depending on whether the project is a New Starts, Small Starts, or  Core Capacity Improvement project (see fig. 1).

New Starts and Core Capacity Improvement projects. New Starts and  Core Capacity Improvement projects must complete two phases in the  development process to be eligible for a Construction grant  agreement—Project Development and Engineering. During the  Project Development phase, among other requirements, the Secretary  must determine that the project has been selected as the locally  preferred alternative at the end of the environmental review process.  Under MAP-21 changes to the Capital Investment Grant program,  New Starts and Core Capacity Improvement projects have 2 years  after the day in which they enter into Project Development to complete  the activities required to obtain a project rating by FTA, a process that  is discussed further below. If approved to advance into the second  phase of the development process—Engineering—project sponsors  must, among other things, develop a firm and reliable cost, scope,  and schedule for the project and obtain all non-Capital Investment  Grant program funding commitments.

Small Starts projects. Small Starts projects complete a similar but  more streamlined process that requires project sponsors to complete  only one phase—Project Development—to be eligible for a  Construction grant agreement. During this phase, the Secretary must  also determine that the project has been adopted as the locally  preferred alternative and the project sponsor must complete the  environmental review process. To complete Project Development,  project sponsors must develop a firm and reliable cost, scope, and  schedule for the project and obtain all non-Capital Investment Grant  program funding commitments, among other things.

Before FTA can recommend a project to Congress for funding, it is  required by law to rate the project by using a number of criteria designed  to provide important information about project merit. While New Starts  and Small Starts project justification criteria have changed over time,  there are currently six criteria: mobility improvements, environmental  benefits, cost-effectiveness, economic development, land use, and  congestion relief. In contrast, the project justification criteria for Core  Capacity Improvement projects are: mobility improvements,  environmental benefits, cost-effectiveness, economic development,  congestion relief, and existing capacity needs of a corridor. FTA is also  required to evaluate and rate the local financial commitment to the project  and the project sponsor’s ability to operate the project and continue to  operate the existing transit system.

FTA is also required to rate each individual criterion on a five point scale,  from low, medium-low, medium, medium-high, and high. As we have  previously reported, FTA prepares and combines a summary project  justification, which is based on the ratings of the six criteria, and a  summary local financial commitment rating to arrive at a project’s overall  rating, as shown in figure 2. To advance through the development  process and be eligible for funding, proposed projects must score at least  a medium overall project rating (which requires at least a medium rating  for both the summary project justification and the summary local financial  commitment). In order to recommend a project for a grant agreement in  the President’s budget, FTA considers the evaluation and rating of the  project under the specified criteria, availability of Capital Investment Grant  program funds, and the readiness of the proposed project.

Projects that compete for Capital Investment Grant program funding are  formally overseen by FTA with the help of contractors, who provide  assistance to FTA with oversight of planning, construction, and financing  of projects throughout the development process. FTA and its contractors  evaluate each project’s risk, scope, cost, schedule, financial plan, and  project management plan, as well as the project sponsor’s technical  capacity and capability—before recommending a project for funding.  Throughout the development process, project sponsors submit periodic  updates to FTA on different aspects of their projects, such as on project  cost, schedule, projected ridership, and the financing of the projects. FTA  maintains its headquarters in Washington, D.C., with 10 regional offices  throughout the continental United States, to assist with project oversight.

As mentioned previously, this report focuses on the statutory, regulatory,  and other FTA requirements applicable to the Capital Investment Grant  program under MAP-21. In December 2015, the FAST Act was enacted.  In addition to significantly altering or repealing some of the MAP-21  requirements, the FAST Act also made other changes to the Capital  Investment Grant program’s processes. According to FTA officials, some  of those key changes include: (1) raising the dollar threshold for eligibility  for New Starts and Small Starts projects, (2) increasing the number of  projects eligible for funding by allowing joint public transportation and  intercity passenger rail service and commuter rail projects to be eligible  for funding, and (3) eliminating a requirement that corridor-based bus  rapid transit projects must provide weekend service to be eligible for  funding. We plan to examine FTA’s implementation of the FAST Act in  future work on the Capital Investment Grant program.

section_title: FTA Has Made Progress Implementing Most of the Key Required Changes in the Capital Investment Grant Program
paragraphs: FTA has made progress implementing most of the key changes MAP-21  made to the Capital Investment Grant program. As shown in table 1, FTA  has issued policy guidance outlining the new review and evaluation  process and criteria for New Starts, Small Starts, and Core Capacity  Improvement projects and also provided project sponsors with  instructions on how they can request to pre-qualify for a satisfactory rating  based on the characteristics of their project, otherwise known as  warrants. However, FTA has not completed the rulemaking required to  fully implement the MAP-21 changes or fully addressed all requirements,  such as the requirement to establish an evaluation and rating process for  programs of interrelated projects, all of which we discuss below. FTA  officials told us they are working toward addressing the remaining  requirements.
subsections: section_title: Issuing Rules for Evaluating and Rating Projects
paragraphs: FTA has promulgated new rules for the Capital Investment Grant program  but plans to initiate the rulemaking necessary to fully implement the  changes MAP-21 made to the program in the future. Specifically, MAP-21  required FTA to issue rules establishing an evaluation and rating process  for new fixed-guideway capital projects as well as Core Capacity  Improvement projects. In January 2013, FTA issued a final rule  establishing a new regulatory framework for the evaluation and rating of  New Starts and Small Starts projects. FTA initiated this rulemaking—by  issuing a Notice of Proposed Rulemaking—prior to the enactment of  MAP-21, and FTA’s final rule covers portions of the evaluation and rating  requirements for New Starts and Small Starts projects that MAP-21 did  not significantly change. According to FTA, future rulemaking will cover  new items included in MAP-21 that have not yet been the subject of the  rulemaking process, such as the evaluation and rating process for Core  Capacity Improvement projects and the revised processes for New Starts  and Small Starts projects. FTA officials told us they plan to address the  remaining requirements of MAP-21 and now the Fast Act in future  rulemaking. They noted that they still have to review the changes the  FAST Act made to the Capital Investment Grant program and that factors  outside of their control could delay their efforts.

section_title: Issuing Guidance for Evaluating and Rating Projects
paragraphs: FTA provided project sponsors with updated policy guidance for the  Capital Investment Grant program in both 2013 and 2015 and plans to  update its policy guidance again in 2017. MAP-21 required FTA to issue  policy guidance specifying the review and evaluation process and criteria  for new fixed-guideway capital projects and Core Capacity Improvement  projects and issue updated guidance each time FTA makes significant  changes to the rating process and criteria, but not less frequently than  once every 2 years. Concurrent with the January 2013 issuance of the  final rule, FTA solicited public comment on its proposed policy guidance  for New Starts and Small Starts projects and, in August 2013, issued  policy guidance covering the evaluation and rating process for New Starts  and Small Starts projects. In April 2015, FTA again solicited public  comment on its proposed policy guidance for the evaluation and rating  process for Core Capacity Improvement projects along with other topics  not included in FTA’s August 2013 guidance, such as the new  congestion relief criterion and the ways in which projects can qualify for  warrants. Subsequently, FTA issued updated policy guidance for the  program in August 2015. FTA has stated its August 2015 guidance will  serve as a guide for running the Capital Investment Grant program until it  completes the rulemaking to fully implement the MAP-21 changes and  now the requirements of the FAST Act.

In addition to covering the evaluation and rating process for Core  Capacity Improvement projects, FTA’s August 2015 policy guidance also:

Set a deadline for project development: MAP-21 specified that New  Starts and Core Capacity Improvement projects have 2 years after the  day in which they enter into Project Development to complete the  activities required to obtain a project rating by FTA. In addressing  this requirement, FTA’s policy guidance encourages project sponsors  to begin planning early, noting that project sponsors may wish to  conduct early work, such as initiating the environmental review  process, prior to requesting entry into Project Development.

Implemented a new congestion relief criterion: MAP-21 added  congestion relief as a project justification criterion for projects while  removing operating efficiencies as a criterion, and under FTA’s  policy guidance, congestion relief is calculated based on the number  of new weekday linked transit trips that are projected to result from a  project’s implementation.

Utilized the new definition of bus rapid transit as set out in MAP-21:  According to an FTA official, the new definition of bus rapid transit  represented a significant change because it impacts funding  eligibility. For example, the new definition required eligible bus rapid  transit projects to have short headway bi-directional service for a  substantial part of weekdays and weekend days, which was not the  case under SAFETEA-LU. FTA, in turn, defined the interval of time  required for service during peak periods and during other times of the  day and made other related determinations.

FTA officials told us they anticipated soliciting public comment on FTA’s  policy guidance again later this year or in 2017 in order to meet the MAP- 21 requirement that FTA issue new guidance no less than every 2 years.

section_title: Establishing an Evaluation and Rating Process for Programs of Interrelated Projects
paragraphs: FTA plans to address the programs of interrelated project provisions of  MAP-21 through future rulemaking and policy guidance updates. FTA  officials told us that before they could begin working to address these  provisions, they first needed to establish the evaluation and rating  process for Core Capacity Improvement projects because a Core  Capacity Improvement project could be one of the interrelated projects.  FTA’s August 2015 policy guidance covers the evaluation and rating  process for Core Capacity Improvement projects; however, officials also  said that some aspects of the law related to programs of interrelated  projects were unclear and made it difficult to implement. For example,  MAP-21 did not specify which evaluation criteria FTA should use to rate  programs of interrelated projects that include more than one type of  project. At the time of our review, FTA was working with Congress to  address these issues and, in December 2015, the FAST Act was  enacted, which officials told us provided the clarification they sought. FTA  officials told us they plan to address these provisions in future rulemaking  and policy guidance updates; however, they had no firm date for when  these provisions would be implemented and noted it would take time.  Figure 3 shows an illustrative example of a proposed program of  interrelated projects consisting of two Core Capacity Improvement  projects and one Small Starts project in Dallas, Texas.

section_title: Using an Expedited Technical-Capacity Review Process
paragraphs: FTA is finalizing the development of a tool that will help officials determine  the level of review required of project sponsors based on a number of risk  factors, such as the total cost and complexity of a proposed project and  the project sponsor’s in-house technical capacity and capability.  According to FTA officials, this tool, once complete, will address the MAP- 21 requirement that FTA use an expedited technical-capacity review  process for project sponsors under certain circumstances. Specifically,  the expedited review would be used for project sponsors that have  recently and successfully completed a project that achieved budget, cost,  and ridership outcomes consistent with or better than projections and that  has demonstrated continued staff expertise and other resources  necessary to implement a new project. FTA officials estimated that the  development of this tool would be completed over the next few months.

section_title: Making Greater Use of Warrants
paragraphs: At the time of our review, FTA had provided project sponsors with  instructions on how to request the use of warrants; however, it was too  early to tell the extent to which FTA will be able to make greater use of  warrants. Warrants are ways that proposed projects can pre-qualify for a  satisfactory rating on a given criterion based on the characteristics of a  project or the project corridor as long as the Capital Investment Grant  program’s share of the project does not exceed $100 million or 50 percent  of the project’s cost and the applicant certifies that its existing public- transportation system is in a state of good repair. For example, New  Starts projects can qualify for an automatic rating of medium for some  criteria as long as the total capital cost of the proposed project and the  number of existing weekday transit trips in the corridor meet certain  eligibility criteria, among other things. FTA’s August 2015 policy guidance  specified the parameters that FTA will use to determine if projects are  eligible for warrants and provided project sponsors with instructions on  how to request the use of warrants. FTA officials told us that for the  most recent rating cycle—which is also the first rating cycle in which FTA  allowed the use of expanded warrants—three project sponsors requested  warrants and FTA determined two were eligible. According to FTA  officials, it will take several rating cycles and feedback from project  sponsors before the officials will have enough information to assess the  effect of expanded warrants.

section_title: Selected Project Sponsors Expressed Support for MAP-21 Changes to the Capital Investment Grant Program and FTA’s Implementation of Those Changes
paragraphs: The selected project sponsors we contacted were generally supportive of  the changes MAP-21 made to the Capital Investment Grant program and  of FTA’s implementation of the changes. However, the project sponsors  also told us they were concerned about the potential impact some of the  changes—such as locking in funding at entry into Engineering and  requiring New Starts and Core Capacity Improvement projects to  complete Project Development within 2 years—might have on project  sponsors. In addition, while the number of projects in the Capital  Investment Grant program has increased by about 70 percent since 2012,  project sponsors also told us it was too early to tell the extent to which the  MAP-21 changes will help expedite projects through the program.
subsections: section_title: Project Sponsors Generally Support the MAP-21 Changes but Are Concerned about Some Changes’ Potential Effects
paragraphs: A prevalent theme from our discussions with representatives from 13  project sponsors was that they generally support changes—such as: (1)  streamlining the project development process, (2) establishing Core  Capacity Improvement projects as a new category of eligible projects, (3)  instituting a 2-year requirement for New Starts and Core Capacity  Improvement projects to complete Project Development, and (4) revising  the evaluation and rating process, that MAP-21 made to the Capital  Investment Grant program. Representatives from 9 of the 13 project  sponsors we interviewed told us that the changes streamlined the project  development process by decreasing the number of time-consuming  reviews FTA undertakes or by eliminating what these representatives  considered to be burdensome requirements, such as the alternatives  analysis requirement under SAFETEA-LU. According to the  representatives we interviewed, streamlining should help expedite  projects through the program because fewer FTA reviews decrease the  amount of work project sponsors need to perform prior to submitting  information to FTA for review. According to APTA representatives, the  elimination of the alternatives analysis requirement was a particularly  positive development for project sponsors because project sponsors  devoted significant resources to analyzing alternatives prior to requesting  entry into the Capital Investment Grant program.

One of the MAP-21 changes that some project sponsors indicated they  were supportive of is the addition of Core Capacity Improvement projects.  Representatives from one project sponsor said the addition of these  projects is a positive development because these projects give project  sponsors options to increase the capacity of a system as ridership  increases, while two others noted that the addition of Core Capacity  Improvement projects expands project eligibility for projects that would  likely not have rated favorably under New Starts criteria. According to  representatives from one of these project sponsors, these projects  expand eligibility because Core Capacity Improvement projects are  designed to increase the capacity of existing corridors, not add  extensions to an existing system. Figures 4 and 5 provide information on  the two Core Capacity Improvement projects we visited for this review— Dallas Area Rapid Transit’s (DART) platform extensions project and  Metropolitan Transportation Authority’s (MTA) power improvements  project in New York City.

Representatives from 6 of 13 project sponsors also indicated that they  were generally supportive of the MAP-21 requirement that New Starts  and Core Capacity Improvement projects complete Project Development  within 2 years. Representatives from two project sponsors told us that  requiring project sponsors to complete more work, such as initiating the  environmental review process, prior to entering Project Development  should help expedite a project’s progress through the program because  completing this work decreases the amount of work project sponsors  need to complete while in Project Development. Further, representatives  from one project sponsor indicated that this change should also deter  project sponsors that do not yet have defined projects from entering the  program. However, as discussed below, most of the project sponsors also  raised some concerns about the 2-year completion deadline.

In addition, representatives from 12 of the 13 project sponsors told us that  they were generally supportive of the changes MAP-21 made to the  evaluation and rating process. Representatives from one project sponsor  noted, for example, that the MAP-21 changes have greatly simplified and  streamlined the review process and made it more transparent.  Representatives from another project sponsor also noted that the  changes required FTA to implement more evaluative measures that take  into account improvements that benefit existing riders, such as measures  designed to reduce travel time, rather than focusing solely on the addition  of new riders.

However, project sponsors also raised some concerns regarding certain  aspects of the MAP-21 changes.

Representatives from 11 of the 13 project sponsors told us that  requiring New Starts and Core Capacity Improvement projects to  complete Project Development activities within 2 years could pose a  challenge for projects sponsors—for example, increasing project  sponsors’ costs because project sponsors may have to perform more  work prior to entering Project Development. These representatives  noted that such work is not eligible for pre-award authority under  MAP-21. In FTA’s August 2015 policy guidance, FTA acknowledged  that it may be challenging for certain proposed projects to complete  Project Development within 2 years. However, FTA also  acknowledged that the intent of the MAP-21 changes was to help  projects make quick progress and not linger in the program, and FTA  encouraged project sponsors to perform whatever work they feel  necessary prior to requesting entry into Project Development.

Representatives from 5 of the 13 project sponsors indicated that  locking in Capital Investment Grant program funding at entry into the  Engineering phase could be too early in the development process and  could pose a challenge because some projects may have yet to  develop realistic cost and schedule estimates. According to these  representatives, locking in funding at entry into Engineering increases  the risk of escalating costs to project sponsors—costs which project  sponsors would be responsible for—and is a change compared to  under SAFETEA-LU where funding was locked in prior to a project  being recommended for a grant agreement. APTA representatives  told us that some projects may spend more time in Project  Development as a result of this change, in order to help ensure that  project sponsors develop more mature cost estimates before locking- in funding. According to FTA, project sponsors, not the federal  government, should bear the risk of cost overruns once a project  enters Engineering. FTA officials noted that the project sponsor  determines when to proceed to Engineering and thus is responsible  for ensuring that a project’s cost estimates are supported by sufficient  engineering and design work.

Representatives from 10 of the 13 project sponsors voiced various  concerns regarding some of the changes MAP-21 made to the  evaluation and rating process. For example, representatives from 4  project sponsors told us that they thought the ridership measure of the  new congestion relief criterion appeared biased toward more mature  regions with legacy transit ridership compared to fast-growing regions  with emerging transit ridership, or, according to representatives from  one of these project sponsors, modes that transport a greater number  of passengers, such as light rail projects. FTA has acknowledged  limitations with the ridership measure and noted it intends to continue  to refine the congestion relief measure over time with input from the  transit industry and experience gained through its implementation of  the MAP-21 changes.

section_title: Selected Project Sponsors Generally Support FTA’s Efforts in Implementing the MAP-21 Changes
paragraphs: Representatives from 11 of 13 project sponsors indicated that they were  generally satisfied with FTA’s implementation of the MAP-21 changes.  For example, representatives from four project sponsors said that FTA  has made a good effort to listen to and incorporate many of the  recommendations offered by project sponsors. APTA representatives  similarly told us that FTA has done an excellent job engaging the transit  industry in trying to streamline the Capital Investment Grant program. In  addition, representatives from 11 of 13 project sponsors said that they  were generally supportive of the policy guidance FTA has issued since  the enactment of MAP-21. For example, representatives from five project  sponsors said FTA’s policy guidance has been comprehensive and useful  in explaining how FTA will implement the MAP-21 changes and  describing what FTA expects of project sponsors. Furthermore,  representatives from all 13 project sponsors said that FTA has continued  to provide support to project sponsors prior to entry into Project  Development, such as during the application process, as well as  throughout the program, as it has worked to implement the MAP-21  changes. For example, project sponsors noted that FTA continues to  provide checklists, roadmaps, and technical assistance, in addition to its  policy guidance updates and reporting instructions. FTA officials noted  that they provide ongoing technical assistance on a routine basis during  each of their conversations with project sponsors.

Although project sponsors were generally satisfied with FTA’s efforts thus  far, they pointed out that not all MAP-21 changes, such as the programs  of interrelated projects provisions, have been implemented yet. In  addition, representatives from 9 of the 13 project sponsors told us they  thought it took a long time for FTA to issue some of its policy guidance.  FTA officials noted that by law they are required to issue new policy  guidance for the Capital Investment Grant program no less than every 2  years and emphasized that by law they are also required to invite and  respond to public comment on their guidance via the Federal Register— requirements that are time-consuming to comply with. Representatives  from 11 of the 13 project sponsors also offered various suggestions  regarding how FTA could enhance the support it provides project  sponsors, such as by providing checklists for different types of projects,  such as design-build, operate-maintain, or public-private partnerships or  by increasing the number of training opportunities it provides project  sponsors.

section_title: Substantially More Projects Have Entered the Program since MAP-21, but Whether They Will Progress More Expeditiously Is Not Yet Known
paragraphs: Since 2012, the total number of projects in the Capital Investment Grant  program has increased by 70 percent, from 37 projects as of February  2012 to 63 projects as of February 2016, as shown in figure 6. FTA  officials, selected project sponsors, and representatives from APTA  largely attributed this growth to the fact that under MAP-21, FTA is no  longer required to rate proposed projects prior to their entry into the  Capital Investment Grant program. While FTA officials told us they view  increased participation in the program as an opportunity to help improve  public transit in communities across the country, they also said such  growth presents challenges, noting that FTA’s resources to review and  evaluate projects have largely remained flat over the last several years.  Further, they noted that participation in the program by Small Starts  projects is increasing—since 2012, Small Starts projects, as a percentage  of the total number of projects, increased from about 24 percent to more  than 50 percent—and that Small Starts project sponsors typically have  little experience constructing major capital projects. Consequently, FTA  often provides those project sponsors with greater levels of technical  assistance and support. FTA officials told us they have requested  additional funding from Congress to address these challenges. They also  noted that absent being given additional resources, they cannot spend as  much time providing technical assistance or evaluating projects.

While the number of projects in the Capital Investment Grant program has  increased since the enactment of MAP-21, we found that limited data  were available to assess whether projects were progressing through the  program more quickly compared to under SAFETEA-LU. For example, at  the time of our review only 4 projects had approached the 2-year deadline  to complete Project Development. According to FTA officials, 3 of these  projects completed the activities required to obtain a project rating from  FTA before their 2-year deadlines passed while the third requested to  postpone entry into Engineering to complete additional design work and  address local funding issues.

Representatives from 8 of the 13 project sponsors we spoke with and  representatives from APTA also felt that it was is too early to tell the  extent to which the MAP-21 changes will help expedite projects through  the program. For example, among other things, representatives from  these project sponsors told us that while MAP-21 consolidated the  number of phases in the development process it was not yet apparent to  them how this might affect their projects since they perceived they would  still have to complete the same amount of work. In discussing this issue  with FTA, officials emphasized that projects were not far enough along for  FTA to determine whether the MAP-21 changes are expediting projects  through the program.

section_title: Agency Comments
paragraphs: We provided a draft of this report to DOT for review and comment. In its  comments, which we have reproduced in appendix II, DOT noted that it is  committed to continuing its efforts to improve the Capital Investment  Grant program while ensuring that project evaluations provide important  information to decision makers. DOT also provided technical comments  that we incorporated where appropriate.

We are sending copies of this report to interested congressional  committees and the Secretary of the Department of Transportation. In  addition, this report will be available at no charge on GAO’s website at  http://www.gao.gov.

If you or your staff have any questions or would like to discuss this work,  please contact me at (202) 512-2834 or GoldsteinM@gao.gov. Contact  points for our Offices of Congressional Relations and Public Affairs may  be found on the last page of this report. GAO staff who made key  contributions to this report are listed in appendix III.

section_title: Appendix I: Objectives, Scope, and Methodology
paragraphs: This report discusses: (1) the Federal Transit Administration’s (FTA)  progress in implementing changes the Moving Ahead for Progress in the  21st Century Act (MAP-21) made to the Capital Investment Grant  program and (2) how selected project sponsors view the MAP-21  changes and FTA’s implementation of those changes. We focused our  work on selected statutory requirements contained in MAP-21 that were  not significantly altered or repealed by the Fixing America’s Surface  Transportation Act (FAST Act).

To address our objectives, we reviewed the relevant provisions of MAP- 21, the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A  Legacy for Users (SAFETEA-LU), and the FAST Act. We also reviewed  FTA’s policy guidance; other pertinent FTA documents related to the  program, such as FTA’s annual reports to Congress; and our body of  work on FTA’s Capital Investment Grant program. In addition, we  interviewed FTA officials, representatives of the American Public  Transportation Association, and selected project sponsors. Specifically,  we interviewed representatives from 13 project sponsors representing 17  of 52 projects participating in the program as of February 2015 and  conducted a content analysis of the interviews with project sponsors to  identify and summarize themes that emerged during our discussions. The  information obtained from our interviews with project sponsors is not  generalizable to all project sponsors but provides insight into project  sponsors’ views of the MAP-21 changes thus far. We also visited New  York City and Dallas, Texas, to tour the sites of two proposed Core  Capacity Improvement projects. The project sponsors we contacted and  the locations we visited were selected based on a number of factors, the  primary being previous project experience in FTA’s Capital Investment  Grant program under SAFETEA-LU, which provided a basis to compare  changes made by MAP-21. These project sponsors represent 7 New  Starts projects, 8 Small Starts projects, and 2 Core Capacity  Improvement projects, as well as different rail modes (heavy rail, light rail,   commuter rail) and both bus rapid transit and streetcar projects, as shown  in table 2.

We conducted this performance audit from July 2015 through April 2016  in accordance with generally accepted government auditing standards.  Those standards require that we plan and perform the audit to obtain  sufficient, appropriate evidence to provide a reasonable basis for our  findings and conclusions based on our audit objectives. We believe that  the evidence obtained provides a reasonable basis for our findings and  conclusions based on our audit objectives.

section_title: Appendix II: Comments from the Department of Transportation

section_title: Appendix III: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact

section_title: Staff Acknowledgments
paragraphs: In addition to the contact above, key contributors to this report included  Brandon Haller (Assistant Director), Andrew Burton, Geoffrey Hamilton,  Wesley A. Johnson, Delwen Jones, Hannah Laufe, Malika Rice, and  Andrew Stavisky.

section_title: Related GAO Products
paragraphs: Public Transportation: Multiple Factors Influence Extent of Transit- Oriented Development. GAO-15-70. Washington, D.C.: November 18,  2014.

Public Transit: Length of Development Process, Cost Estimates, and  Ridership Forecasts for Capital-Investment Grant Projects. GAO-14-472.  Washington, D.C.: May 30, 2014.

Public Transit: Funding for New Starts and Small Starts Projects, October  2004 through June 2012. GAO-13-40. Washington, D.C.: November 14,  2012.

Bus Rapid Transit: Projects Improve Transit Service and Can Contribute  to Economic Development. GAO-12-811. Washington, D.C.: July 25,  2012.

Public Transportation: Requirements for Smaller Capital Projects  Generally Seen as Less Burdensome. GAO-11-778. Washington, D.C.:  August 2, 2011.

Public Transportation: Use of Contractors Is Generally Enhancing Transit  Project Oversight, and FTA is Taking Actions to Address Some  Stakeholder Concerns. GAO-10-909. Washington, D.C.: September 14,  2010.

Public Transportation: Federal Project Approval Process Remains a  Barrier to Greater Private Sector Role and DOT Could Enhance Efforts to  Assist Project Sponsors. GAO-10-19. Washington, D.C.: October 29,  2009.

Public Transportation: Better Data Needed to Assess Length of New  Starts Process, and Options Exist to Expedite Project Development.  GAO-09-784. Washington, D.C.: August 6, 2009.

Public Transportation: New Starts Program Challenges and Preliminary  Observations on Expediting Project Development. GAO-09-763T.  Washington, D.C.: June 3, 2009.

Public Transportation: Improvements Are Needed to More Fully Assess  Predicted Impacts of New Starts Projects. GAO-08-844. Washington,  D.C.: July 25, 2008.

Public Transportation: Future Demand Is Likely for New Starts and Small  Starts Programs, but Improvements Needed to the Small Starts  Application Process. GAO-07-917. Washington, D.C.: July 27, 2007.

Public Transportation: New Starts Program Is in a Period of Transition.  GAO-06-819. Washington, D.C.: August 30, 2006.

Public Transportation: Preliminary Information on FTA’s Implementation  of SAFETEA-LU Changes. GAO-06-910T. Washington, D.C.: June 27,  2006.

Public Transportation: Opportunities Exist to Improve the Communication  and Transparency of Changes Made to the New Starts Program.  GAO-05-674. Washington, D.C.: June 28, 2005.

Mass Transit: FTA Needs to Better Define and Assess Impact of Certain  Policies on New Starts Program. GAO-04-748. Washington, D.C.: June  25, 2004.

Mass Transit: FTA Needs to Provide Clear Information and Additional  Guidance on the New Starts Ratings Process. GAO-03-701. Washington,  D.C.: June 23, 2003.

Mass Transit: FTA’s New Starts Commitments for Fiscal Year 2003.  GAO-02-603. Washington, D.C.: April 30, 2002.

Mass Transit: FTA Could Relieve New Starts Program Funding  Constraints. GAO-01-987. Washington, D.C.: August 15, 2001.

Mass Transit: Implementation of FTA’s New Starts Evaluation Process  and FY 2001 Funding Proposals. GAO/RCED-00-149. Washington, D.C.:  April 28, 2000.


Question-summary annotations: questions: question: What does FTA's Capital Investment Grant program provide funds for each year?
answer: FTA's Capital Investment Grant program provides roughly $2 billion in appropriated funds each year to help states, cities, and localities plan and build new or extensions to existing fixed-guideway transit systems.
child_questions: question: How do project sponsors apply for funding through this program?
answer: Under this program, project sponsors—usually local transit agencies—have typically applied for their projects to receive federal funding as either a New Starts or a Small Starts project.

question: How was the Capital Investment Grant program revised in 2012?
answer: In 2012, MAP-21 created a new category of eligible projects called Core Capacity Improvement projects and also revised the process proposed projects must follow to be eligible for and receive federal funding.

questions: question: What did MAP-21 require GAO to do?
answer: MAP-21 included a provision for GAO to biennially review FTA's and the Department of Transportation's implementation of this program.

question: What does this report discuss?
answer: This report discusses: (1) FTA's progress in implementing changes to the program required by MAP-21 and (2) how selected project sponsors view the MAP-21 changes and FTA's implementation of those changes.
child_questions: question: How did GAO collect data for this report?
answer: To conduct this review, GAO reviewed the relevant provisions of pertinent laws and FTA's policy guidance, interviewed FTA officials and representatives from 13 project sponsors representing 17 of 52 projects participating in the program, and visited the sites of two Core Capacity Improvement projects.
child_questions: question: How were project sponsors and locations visited selected?
answer: Project sponsors and locations visited were selected based on previous experience in the program, among other things.