Executive Summary

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This report provides the U.S. Department of Transportation's recommendations to Congress for allocation of funds to be made available under 49 U.S.C. 5309 (formerly Section 3 of the Federal Transit Act [FT Act]) for construction of new fixed guideway systems and extensions (major capital investments or "new starts") for Fiscal Year1998. The report is required by 49 U.S.C. 5309(m)(3) (formerly Section 3(j) of the FT Act).

The President's budget for FY 1998 proposes that $634.00 million be made available for the 5309 (Section 3) major capital investment program. After setting aside apercentage of these funds for oversight activities as specified in 5327 (Section 23), $629.24 million is available for project grants. This report recommends15projects for funding in FY 1998, all of which have existing Federal funding commitments in the form of FullFunding Grant Agreements(FFGA), or are expected to have such commitments during the course of calendar year 1997.

The Department historically has recommended that these funds be allocated to major capital investments in accordance with these principles:

  • Any project recommended for new funding commitments should meet the project justification, finance, and process criteria established by 5309(e)(2)-(7) (Section 3(i)) and be consistent with Executive Order 12893, "Principles for Federal Infrastructure Investments," issued January26, 1994.
  • Existing or pending FFGA commitments should be honored before any additional commitments are made, to the extent that these projects are likely to be capable of obligating funds in the coming fiscal year.
  • The FFGA defines the terms of the Federal commitment to a specific project, including funding. Upon completion of an FFGA, the Federal funding commitment has been fulfilled. Additional project funding will not be recommended.
  • Funding for initial planning efforts such as Major Investment Studies (MISs) is provided through 5303Planning(Section 8) or 5307 Formula Grants (Section 9) programs; 5309 (Section 3) funds should not be used for this purpose.
  • Firm funding commitments, embodied in FFGAs, should not be made until preliminary engineering is substantially complete since costs, benefits, and impacts are not accurately known until this level of engineering approaches completion.
  • Letters of Intent (LOI's) (ultimately anticipating FFGA's) authorized by 5309(g)(Section 3(a)(4)) should be issued only to worthy projects which have progressed to the point (generally through a Major Investment Study (MIS), at a minimum) that their justification and level of local financial commitment can be established with some certainty.
  • LOIs should be awarded to the best projects, in terms of financial commitment and other project justification criteria, in an order which is based on the degree to which each project meets these criteria.
  • Funding should be provided to the most worthy projects to allow them to proceed through the process on a reasonable schedule, to the extent that funds can be obligated to such projects in the upcoming fiscal year.

Based on the principles above, the following new start projects with existing FFGA's should be funded within the $629.24 million in major capital investment funds recommended for FY 1998:

  • $44.60 million (and $96.72 million in future funds) to the North Line Extension project in Atlanta, under the December 20, 1994 FFGA for this project;
  • $46.20 million (and $142.32 million in future funds) to the South Boston Piers project, under the FFGA issued for this project on November 5, 1994;
  • $21.40 million (and $95.77 million in future funds) to the Southwest Corridor project in Denver, under the May 9, 1996 FFGA;
  • $51.07 million (and $121.60 million in future funds) to the Houston Regional Bus plan, under the FFGA issued on December 30, 1994;
  • $99.00 million (and $807.27 million in future funds) to the Los Angeles MOS-3 project, including the initial segment of the East Central extension, under the FFGA as amended on December28,1994;
  • $26.94 million (and $21.58 million in future funds) to the MARC extension project to Frederick, Maryland, under the June 19, 1995 FFGA;
  • $54.78 million (and $450.29 million in future funds) to the Hudson-Bergen light rail element of the Urban Core program of projects in northern NewJersey, under the October 15, 1996 FFGA;
  • $26.99 million to the Secaucus Transfer element of the Urban Core program of projects in New Jersey, to complete the Federal commitment under the December 6, 1994 FFGA for this project;
  • $63.39 million (and $36.39 million in future funds) to the Westside light rail extension to Hillsboro in Portland, under the December 21, 1994 FFGA for this project;
  • $42.79 million (and $127.81 million in future funds) to the South LRT extension in Salt Lake City, under the August 2, 1995 FFGA;
  • $21.40 million (and $58.60 million in future funds) to the Tasman LRT project in the San Francisco Bay Area, under the July 2, 1996 FFGA;
  • $25.68 million (and $268.26 million in future funds) to the SanJuan Tren Urbano project, under the FFGA issued on March 13, 1996; and
  • $29.96 million (and $174.23 million in future funds) to the St.Clair extension of the St.Louis light rail system under the October 17, 1996 FFGA.

In addition, we intend to fund the following projects which are expected to have Federal funding commitments in place during calendar year 1997, and which will be ready for construction in 1998, as follows (future funds are estimated until FFGA negotiations are complete):

  • $20.28 million (and $82.98 million in future funds) to the Sacramento light rail extension; and
  • $54.78 million (and $611.30 million in future funds) to the extension of the BART system to San Francisco International Airport.

Five additional projects with FFGA's are not included in these recommendations because the Federal commitment has been fulfilled. These project are the LRT Extensions in Baltimore, the Queens Connector in NewYork, the Pittsburgh/Airport Busway Phase1, the Metrolink project in St.Louis, and the Jacksonville Peoplemover.

The following table summarizes the recommendations for projects to receive funding in FY 1998 (in millions of dollars):

Project FY 1998
Atlanta/North Line $44.60 Construction
Boston/Piers Phase 1 (MOS-2) $46.20 Construction
Denver/SW Corridor $21.40 Construction
Houston/Regional Bus $51.07 Construction
Los Angeles/MOS-3 $99.00 Construction
Maryland/MARC Ext. to Frederick $26.94 Construction
New Jersey/Hudson-Bergen LRT $54.78 Construction
New Jersey/Secaucus $26.99 Construction
Portland/Westside $63.39 Construction
Sacramento/LRT Extension $20.28 Construction
St. Louis/St. Clair Extension $29.96 Construction
Salt Lake City/South LRT $42.79 Construction
San Francisco Area/Tasman $21.40 Construction
SF Area/BART Airport Extension $54.78 Construction
San Juan/Tren Urbano $25.68 Construction
Total $629.24*

*Any errors due to rounding.

These recommendations are intended to bring greater focus to and improve the management of the New Starts/Major Capital Investments program. As the program becomes increasingly oversubscribed, the cost of completing all projects in the development process at any one time far exceeds the amount of Federal funds likely to be available. Overall, the New Starts/Major Capital Investments caseload consists of 85 proposed projects seeking Federal discretionary funds.

The funding allocations recommended in this report provide, within the constraints imposed by the budget caps, for the timely and efficient completion of those projects that have progressed the furthest in the development process. A failure to focus funds in the recommended manner risks creating additional expectations that may be difficult to meet in the current budget environment.

The commitments which are proposed in this report total $3.724billion in FY 1998 and outyear funds. FTA intends to manage the New Starts/Major Capital Investments caseload so that as individual projects in this group meet the necessary requirements in the development process, negotiations for FFGAs can proceed while keeping the total Federal commitments within both the available funding authority and the program level that can be accommodated within the budget caps.

Table 1 summarizes the recommendations for FY 1998 funding and overall funding commitments. For each project in the New Starts process, the first column indicates the amount of FY 1996 and prior year funds that have been obligated by each project, and the second column shows the amount which has not yet been obligated. The third column shows the amount of funds available as a result of the FY 1997 DOT Appropriations Act (adjusted to account for oversight activities). The fifth column summarizes the recommendations for funding in FY 1998, and the sixth column shows the maximum amount of 5309 (Section 3) outyear funding recommended to be committed to these projects. The last column in Table 1 sums the first six columns and shows the total amount which would be made available for each project from 5309 (Section 3) over the life of that project.

Table 1: FY 1998 Funding for New Starts Projects