1. New Starts/Small Starts Workshop APTA’s Legislative Conference March 14, 2007

2. 2 Today’s Workshop Intro to Program and FY2008 New Starts Annual Report New Starts Project Planning New Starts Evaluation and Funding Small Starts Interim Guidance and New Starts/Small Starts Rulemaking Deloitte Report on New Starts and FTA Response

3. 3 New Starts Program Over $1.5 billion annually for “fixed guideway” transit investments Current “pipeline:” 26 projects in PE, Final Design, and Small Starts “Project Development” Total cost of pipeline: >$24.7 billion, $11.5 billion in New Starts funding FTA tracking >100 planning studies considering major transit capital investments

4. 4 New Starts/Small Starts Projects PE, Final Design, and Project Development

5. 5 FY 2008 Evaluation Approach No changes in measures used – consistent with FY 2007 approach –Transparent evaluation/rating process –Continuing focus on project outcomes –Project risk assessments to support evaluation information Cost effectiveness breakpoints adjusted for inflation – per May 2006 Reporting Instructions Implements some features of SAFETEA-LU: –Changes rating nomenclature and scale -Pre-SAFETEA-LU: Highly Recommended, Recommended, Not Recommended -SAFETEA-LU: High, Medium, Low –Limits Secretary’s ability to require a non-Federal financial commitment for a project that is more than 20 percent of the net capital project cost. Includes first time evaluation of Small Starts projects

6. 6 Summary of Overall Project Ratings FY 2007 Report 24 Projects FY 2008 Report 25 Projects 1 High 2 High 17 Medium 18 Medium 2 Low 4 Exempt 5 Exempt

7. 7 Summary of FY 2008 New Starts and Small Starts Budget Recommendations 11 existing FFGAs$863.7 M 2 Pending FFGAs$120.0 M 2 Proposed FFGAs$210.0 M 6 Other Projects$ 72.1 M 4 Proposed Small Starts $ 51.8 M Other Small Starts$ 48.2 M FTA Oversight/Denali Commission$ 33.9 M & Ferry Projects (AK/HI) TOTAL FY08 New / Small Starts$1,399 M

8. 8 Pending FFGAs Funding recommendations are the proposed levels in the FFGAs as currently drafted. Both projects recommended for FFGAs previously, in President’s FY 2007 budget. LocationProjectRatingTotal New Starts Share Total Project Cost FY 2008 Budget Denver, COWest Corridor LRTMedium$290.6 M (51 %) $574.2 M $40 M Portland, OR South Corridor I-205/Portland Mall LRT Medium$334.4 M (60 %) $557.4 M $80 M

9. 9 Proposed FFGAs FTA recommends $210.0 million for two proposed FFGAs. Each project: –Is projected to be ready for an FFGA by the end of FY 2008 –Is rated High –Has a Medium or higher rating for cost-effectiveness LocationProjectRatingTotal New Starts Share Total Project Cost FY 2008 Budget New York, NY Second Avenue Subway Phase I High$1,300.0 M (28%) $4,655.4 M $200.0 M Seattle, WAUniversity Link LRT Extension High$750.0 M (46%) $1,645.9 M $10.0 M

10. 10 Other Projects FTA recommends $72.1 million for six other projects. Each project: –Rated Medium or higher –Has a Medium or better cost effectiveness rating, or is exempt by statute LocationProjectRatingTotal New Starts Share Total Project Cost Hartford, CTNew Britain-Hartford BuswayMedium$275.3 M (60%) $458.8 M Minneapolis- Big Lake, MN Northstar Corridor RailMedium$151.8 M (49%) $307.3 M Houston, TXNorth Corridor BRTMedium$137.4 M (50%) $275.3 M Houston, TXSoutheast Corridor BRTMedium$84.8 M (50%) $169.8 M Norfolk, VANorfolk LRTMedium$128.0 M (55%) $232.1 M Northern Virginia, VA Dulles Corridor Metrorail Project- Extension to Wiehle Ave. Medium$900.0 M (44%) $2,065.0 M

11. 11 FTA Senate Authorizing Majority/Minority Senate Appropriations Majority/Minority House Authorizing Majority/Minority House Appropriations Majority/Minority Office of the Secretary OMB White House The New Starts Environment Individual Senate and House Members 315 Projects 16 FFGAs, 26 FD/PE, 100 AA Inspector General Govt Accountability Office Press

12. 12 FTA New Starts Program Goal Fund meritorious projects Develop reliable information on project benefits and costs Ensure projects treated equitably nationally Facilitate communication between FTA, transit industry and Congress

13. 13 How FTA Meets Its Goals Sound and rigorous management of the program Promote - and assist in - the development of reliable information on costs and benefits Transparent evaluation process Local decisions, project ratings, and funding recommendations are based on the best information available to both the public and decision-makers

14. New Starts Project Planning

15. 15 New Starts Project Development Process Project Development: Typically 6-12 Years Alternatives Analysis 1-2 years Preliminary Engineering 2-3 years 3-7 years Operation FTA Approval Required for Full Funding Grant Agreement (FFGA) ~ 100 AA Studies 19 PE Projects 7 FD Projects FTA Approval Required 16 FFGA Projects ConstructionFinal Design

16. 16 Key Decisions for Each Phase of Project Development Systems planning: priority corridor Alternatives analysis: mode and alignment Preliminary engineering: final scope/cost, completion of NEPA, financial plan Final design: construction documents Full Funding Grant Agreement –FTA: funding –Project sponsor: delivery of the project

17. 17 Why Alternatives Analysis Matters. Sets the context for making informed decisions. Answers the questions that need answers: Local questions: –What do we want to do? –What are the benefits? –How much does it cost? –Where’s the money going to come from? –How do we make it happen? FTA questions: –What’s the problem and were all reasonable alternatives considered? –How solid is the LPA decision? –Were the New Starts criteria developed correctly? –How does the project rate? –Should FTA fund it?

18. 18 Alternatives Happen! Political leadership changes Cost increases Funding decreases Opposition to more precise alignments Opposition to project on basis of costs compared to benefits

19. 19 New Starts Planning: FTA Lessons Learned Good planning = good decisionmaking Pay attention to the early decisions Don’t plan to deal with planning issues in PE Acknowledge, manage, and minimize risk Need for consideration of a wide range of alternatives with consistent policy assumptions Need to invest in the time and resources to do it right FTA should be involved early on and throughout the process FTA can add value!

20. New Starts Evaluation and Funding

21. 21 New Starts Rating Criteria Mobility improvements Environmental benefits Operating efficiencies Cost effectiveness* Land Use* Economic Development* (new!) Reliability of costs and ridership forecasts*(new!) Local financial commitment* Other factors* * = Also Small Starts Criteria

22. 22 Summary Rating Project Justification Rating Financial Rating Non-Section 5309 Share Capital Finances Operating Finances Other Factors Low Income Households User Benefits Mobility Improvements Environmental Benefits Operating Efficiencies Cost Effectiveness Land Use The FTA New Starts Evaluation and Rating Framework Minimum Project Development Requirements: Employment Capital Cost O&M Cost User Benefits Metropolitan Planning and Programming Requirements Project Management Technical Capability Other Considerations NEPA Approvals

23. 23 New Starts Overall Ratings  High  Project rated at least "medium-high" for both finance and project justification  Medium  Project rated at least "medium" for both finance and project justification  Low  Project not rated at least "medium" for both finance and project justification

24. 24 Cost Effectiveness Measure Cost per unit of benefit: –Cost measure: Annualized incremental capital (federal and local) plus annual operating cost –Benefit measure: hours of transportation system user benefits

25. 25 Source of Transportation Benefits of New Starts Projects Highway Users: benefits from less congestion due to travelers changing from driving to riding on the New Start Current transit users: benefits from faster travel times for New Starts project compared to their previous transit mode New transit users: benefits from faster travel times for New Starts project

26. 26 Calculation of Transportation Benefits of New Starts Projects Highway Users: not determined because of serious travel model difficulties in quantifying degree of congestion relief Transit users: benefits from faster travel times for New Starts project for all travelers in the region –In-vehicle time –Walk and wait time –Number of transfers –Capacity constraints –Reliability, comfort, security, branding

27. 27 Painting a Picture with User Benefits

28. 28 Cost-Effectiveness Rating Values: –Low >$29 per hour –Medium-low $23 - $28.99 per hour –Medium$15 - $22.99 per hour –Medium-high$11.50 - $14.99 per hour –High < $11.49 per hour

29. 29 Current Land Use Rating Criteria Existing Land Use Transit-supportive Plans and Policies –Growth Management –Transit-supportive Corridor Policies –Supportive Zoning Regulations Near Transit Stations –Tools to Implement Land Use Policies Performance and Impacts of Policies –Performance of Land Use Policies –Potential Impact of Transit Investment on Regional Land Use Other Land Use Considerations

30. 30 Local Financial Commitment Stability and reliability of capital plan Stability and reliability of operating plan Non-Section 5309 New Starts share (overmatch) Key Considerations: –Demonstrated non-New Starts funding commitments –Demonstrated financial capacity –Reasonable cost, revenue, and other assumptions

31. 31 Financial Ratings In Project Development PE Approval – Reasonable financial plan; Funding sources identified; Good non-federal funding history Annual New Starts Evaluation (PE) – Proposed funding sources established; Funds are planned and budgeted; Refined cost estimates FD Approval – At least 50 percent of non-5309 New Starts funding committed; Firm cost estimates; Address funding shortfalls FFGA – 100% non-New Starts funding committed; Funding shortfalls covered

32. 32 What is a Full Funding Grant Agreement (FFGA) ? Formal Agreement signed by FTA and Grantee following detailed review by DOT, OMB and Congress Agreement on Project Scope, Budget, and Schedule Terms and Conditions of Federal Participation Multi-year Funding Commitment (subject to Congressional Appropriations) Caps Federal Section 5309 New Starts funds

33. 33 Full Funding Grant Agreement To receive an FFGA a project must: –Be Authorized in Law –Complete the Planning, Project Development, and NEPA Processes –Meet Project Readiness Requirements (techinical capacity, firm and final cost estimate and funding) –Receive a “Medium” or higher overall rating –Receive a “Medium” or higher cost effectiveness rating –Meet all other Federal Requirements

34. Small Starts Interim Guidance and New Starts/Small Starts Rulemaking

35. 35 Key SAFETEA-LU Provisions Separate Funding Category beginning FY 07 ($200 million authorized annually) Rulemaking Required

36. 36 Small Starts Simplified Process Planning and Alternatives Analysis Project Development Construction Simplified “Project Construction Grant Agreement” Scope Cost Schedule Federal Funding Maximum Amount and Schedule Local Funding Sources

37. 37 Eligibility - Costs Total cost ≤ $250 million New Starts share ≤ $75 million Exempt projects (≤ $25 million New Starts share) may: –Remain exempt until Final Rule – then be evaluated and rated –Be evaluated and rated now

38. 38 Eligibility - Project Definition Fixed guideways, or Corridor bus project including at least: –Substantial transit stations –Traffic signal priority or pre-emption –Low floor buses or level boarding –Branding of the proposed service –10 min peak/15 min off-peak headways or better while operating at least 14 hours a day

39. 39 Eligibility – Very Small Starts Simple, low-cost projects that qualify for streamlined process Very Small Starts eligibility criteria: –Existing daily riders over 3,000/weekday –Total cost under $50 million –Under $3 million per mile, excluding rolling stock

40. 40 Alternatives Analysis for Small Starts Refer to existing alternatives analysis guidance for New Starts Narrower range of alternatives Potentially less complex analytical methods

41. 41 Alternatives Analysis for Very Small Starts Identification of corridor problems or opportunities Definition of the project Analysis of costs, benefits, and impacts of the project compared to existing conditions Determination of financial viability Explanation of choice of preferred alternative Implementation Plan

42. 42 Evaluation of Small Starts Use Existing New Starts Criteria for Small Starts –Project Justification -Land-use -Cost-effectiveness -Other factors, including economic development, congestion and pricing strategies –Local Financial Commitment Simplifications to New Starts Framework –Fewer criteria –Opening year forecasts –Simpler travel forecasting procedures possible

43. 43 Evaluation of Small Starts Cost Effectiveness Rating Use current breakpoints for ratings Increase opening year user benefits to reflect average national 20-year growth rate

44. 44 Evaluation of Small or Very Small Starts – Local Financial Commitment Small or Very Small Starts projects receive “medium” for local financial commitment if: –Reasonable plan to secure local share (all non-New Starts funding committed for PCGA) –Project O&M under 5 percent of agency operating budget –Agency in solid financial condition Projects that cannot meet the conditions above submit a financial plan –According to FTA guidance –Covering period up to and including opening year –Evaluated based on criteria used for New Starts

45. 45 FTA Funding Recommendations Small or Very Small Starts eligible for funding if: –In project development –“Ready” to implement project –Summary rating of “Medium” or better Like all New Starts - No funding guarantee

46. 46 New and Small Starts Program Changes Proposed beginning April/May, 2007 No submission of information on operating efficiencies or environmental benefits Resubmission of information on transit-supportive land use optional No submission of information for the Annual Report for projects not eligible for a funding recommendation Timely FTA comment on documents describing alternatives For PE approval, travel models validated on ridership surveys no older than 5 years (beginning April 2009) Constants allowed for sponsors of new modes to a region

47. 47 New and Small Starts Program Changes Proposed beginning April/May, 2007 (con’t) Overall project rating on 5 levels from high to low High financial rating for SS/VSS with 50% or more non- New Starts funding New mobility measure Reduced set of subfactors for finance rating Consideration of opportunity of private contracting in operation plan rating Conditions for rating information in DEISs and AAs Project justification overall rating effected by project part of congestion management strategy and rating of “make the case” document as “other factors”

48. 48 Planned Schedule for Rulemaking April 2007: Publication of the Notice of Propose Rulemaking for New and Small Starts April 2007: Publication of Weights and Measures document for NPRM April 2008: Publication of the Final Rule for New and Small Starts April 2008: Publication of Weights and Measures document for Final Rule

49. Deloitte Report on New Starts and FTA Response

50. 50 Deloitte Report Wide ranging assessment of New Starts program Goal was to examine opportunities for –Improving FTA’s management of the program –Improve communications w/in FTA and between FTA and industry –Accelerating/simplifying the process for implementing New Starts

51. 51 Improving Management of the Program Ensuring funding of the most meritorious investments –Capture more benefits in project evaluation process -Incorporating Other Factors in Evaluation Process, as proposed in Feb 2007 draft policy guidance -Add “modal constants” to calculation of benefits, per 07 policy guidance -Additional strategies in NPRM –Enhance FTA’s understanding of projects and program -Examine staffing, oversight, budget resources and re-align where necessary

52. 52 Improving Management of the Program Optimize program resources –Develop internal HQ-Regional Office “Team” operating procedures –Enhance New Starts staff training –Use technology to achieve efficiencies

53. 53 Improve communications More program outreach, training –More Listening Sessions to be held this Spring/Summer –Training in AA, Travel Forecasting, other topics –Re-energize Roundtables, consider Small Starts conference? Clarify program requirements –Project Development Milestone Checklists –More program guidance

54. 54 Accelerating/simplifying the process for implementing New Starts Minimize reporting requirements –Proposed reductions in annual reporting in 07 policy guidance Improve FTA review times –Implement “case management system” –Use of project development agreements to solidify project schedule, FTA response and oversight commitments Encourage alternative project delivery approaches –Streamlining for public-private partnerships