These new start project profiles provide background information supporting the Department of Transportation's new start funding recommendations for FY 1998. The Department's funding recommendations are being provided to the Congress pursuant to 49 U.S.C. 5309(m)(3) (formerly Section 3(j) of the Federal Transit Act) The funding recommendations are based in part on the decision criteria defined in 49 U.S.C. 5309(e) (formerly Section 3(i)(1) of the Federal Transit Act).
Under 49 U.S.C. 5309(e), discretionary capital grants and loans for the construction of a new fixed guideway system or the extension of an existing system may be made only if the Secretary determines that the proposed project is:
- based on the results of an alternatives analysis and preliminary engineering;
- justified based on a comprehensive review of its mobility improvements, environmental benefits, cost effectiveness, and operating efficiencies; and
- supported by an acceptable degree of local financial commitment, including evidence of stable and dependable funding sources to construct, maintain, and operate the system or extension.(1)
The 49 U.S.C. 5309(e) criteria provide a basis for selecting, from among the eligible projects, those which are the most worthy of Federal funds. To this end, the new start project profiles describe the fixed guideway projects that are most advanced, and evaluate them in terms of the 5309(e) criteria.
Profiles have been prepared for each project or study undergoing final design and preliminary engineering. In addition, profiles have been prepared for projects that are under construction if additional funds are needed in FY 1998 to fulfill full funding contract commitments. A number of system planning studies, particularly those where congressional interest has been demonstrated through prior year earmarks, are also covered.
In general, the profiles contain five sections:
- Description: The description section briefly describes a project's physical characteristics and presents the latest estimates of cost and ridership. Unless otherwise noted, cost estimates are expressed in escalated (year of construction) dollars.
- Status: This section identifies where the project is in the major investment planning and project development process. It indicates, for example, whether alternatives analysis and preliminary engineering have been completed. If not, it indicates when current studies are expected to be completed. This section also cites relevant statutory requirements.
- Justification: This section presents an evaluation of the project's merit based on the criteria cited in 49 U.S.C. 5309(e). The evaluation process is further described below.
- Local Financial Commitment: This section notes the size of the local match and/or overmatch, and provides FTA's rating on the soundness of the capital finance plan and the stability and reliability of local operating revenues. The financial ratings process is further described below.
- Other Factors: Other rating factors which may be useful in identifying the most meritorious projects are described in this section. The section highlights projects where local officials have demonstrated community support for transit by means of commitments to supportive land use and transportation policies.
The other factors section of the profiles for ten projects in preliminary engineering includes a brief assessment of land use policies and conditions. These projects participated voluntarily in a pilot effort completed by the FTA Office of Planning which is described later in this preface.
The profiles for projects covered by full funding grant agreements include the project description and status sections only, since a decision to fund the project has already been reached. Also, many of the profiles describing system planning studies do not cover project justification, local financial commitment, or other factors because this information is still being developed as part of the local planning process. Once the planning process results in the selection of a particular project, FTA will include information on the chosen project in future reports.
How the Ratings were Developed
As part of the normal system planning and project development process, local agencies develop the information that FTA uses to assess projects in terms of project justification and local financial commitment. The specific information used for these evaluations is outlined below.
The Intermodal Surface Transportation Efficiency Act of 1991 (ISTEA) greatly broadened the new start criteria. Projects are to be evaluated based on a comprehensive review that takes into account mobility improvements, cost effectiveness, environmental benefits, and operating efficiencies. This year's ratings address the full range of ISTEA criteria.
The project profiles address each project's impact on mobility in terms of such measures as travel time savings, increases in transit ridership, and reductions in highway congestion. The discussion attempts to briefly summarize the most significant transportation benefits expected to result from a proposed project, with an emphasis on total travel time savings for users and non users of the project. FTA has given a "high" rating to projects that would save 10,000 or more hours of travel time per day, compared with the transportation system management (TSM) alternative. "Medium" was given to projects that would save zero to 10,000 hours. "Low" indicates projects that would increase travel time.
The cost effectiveness of a proposed major investment is measured in terms of its added benefits and added costs when compared to a TSM alternative. The TSM alternative includes such low cost actions as traffic engineering, transit operational changes, and modest capital improvements.
For the purpose of the FY 1998 ratings, cost effectiveness was measured using the cost-per-added-trip index which was introduced in FTA's 1984 Major Capital Investment Policy. To compute the new trip index, benefits are measured in terms of added riders, travel time savings for existing riders, and operating cost savings. Additional ridership is a measure of how well a transit facility improves transit service, and can also represent many of transit's potential secondary benefits, such as the structuring of urban development patterns and reductions in congestion, pollutant emissions, and energy consumption. The travel time savings measure reflects improved travel conditions for existing transit users, and is an indicator of improved mobility for the transit dependent. Changes in operating and maintenance costs are included to reflect the potential for improvements in efficiency introduced by new transit facilities. The index takes the form of cost-per-added-rider; the lower the index, the more cost-effective the project.
This year's cost effectiveness indices are based on calculations that assume that travel time is worth 80 percent of the average metropolitan wage rate, or $11.70. This is consistent with the assumed value of time used in last year's report, but differs from values applied in previous year's reports which equaled $4.60 per hour for work trips and $2.30 for non-work trips.
Recognizing the linkages between ISTEA and the Clean Air Act, the FTA's assessment of environmental benefits focuses on a project's contribution toward attaining and maintaining the National Ambient Air Quality Standards. For each project, the profiles identify the severity of the region's air quality problem in terms of the designations and classifications assigned by the Environmental Protection Agency. For ozone, the nonattainment classifications (ranging from most to least severe) are:
- Severe-17 (17 years to attain and design value is based on 1986-88 data)
- Severe-15 (15 years to attain)
Carbon monoxide nonattainment classifications (from most to least severe) are:
- Moderate > 12.7 ppm
- Moderate <= 12.7 ppm
To identify the project's contribution to improving air quality, the profiles indicate how much the project is expected to reduce emissions or vehicle miles of travel. These data comes directly from the relevant project studies, where available. Other environmental benefits and impacts are also identified where they are thought to be highly significant.
A project's contribution to the operating efficiency of the transit system is measured in terms of systemwide operating costs per passenger. The project profiles present such data for the proposed project and two baseline alternatives, the TSM and No Build alternatives. FTA has given a "high" rating to those projects which would reduce the systemwide operating cost per passenger by 5 percent or more compared with the TSM baseline. Where the reduction is 0 to 5 percent, a "medium" rating is assigned. A "low" rating is given where the operating cost per passenger is higher with the preferred alternative than with the TSM baseline.
Local Financial Commitment
FTA's evaluation of the local financial commitment to a proposed project focuses on the proposed local share of project costs, the strength of the proposed capital financing plan, and the stability and reliability of sources of operating deficit funding. The FY 1998 evaluations were supported by reviews conducted by one financial contractor, Booz-Allen & Hamilton, Inc.
Local share refers to the percentage of capital costs to be met with non-Federal funding, and includes both the local match required by Federal law and any capital "overmatch." Overmatch is accounted for in the rating process because it reduces the required Federal commitment, thus leveraging limited Federal funds, and because it indicates a strong local commitment to the project. The use of flexible funds and innovative financing techniques is noted, where appropriate.
The evaluation of each project's proposed capital financing plan takes two principal forms. First, the plan is reviewed to determine the stability and reliability of each proposed source of local match. This includes a review of inter-governmental grants, tax sources, and debt obligations. Each revenue source is reviewed for availability within the project timetable. Second, the financing plan is evaluated to determine if adequate provisions have been made to cover unanticipated cost overruns. The strength of the capital finance plan is rated high, medium, or low. The indicators used to assign these ratings are further explained in Table A-1.
The third component of the financial rating is an assessment of the ability of the local transit agency to fund operation of the system as planned once the guideway project is built. This rating focuses on the operating revenue base and its ability to expand to meet the incremental operating costs associated with a new fixed guideway investment and any other new services and facilities.
The profiles also state the average age of the applicant's bus fleet. This information illustrates the extent to which the applicant has been reinvesting in its existing system. Again, projects are rated high, medium, or low (see Table A-2).
Pilot Assessment of Land Use Policies and Conditions
In September 1996, the FTA Office of Planning initiated a pilot assessment of new start projects in terms of transit supportive land use policies and existing conditions. This pilot effort was undertaken in anticipation of the revised Section 5309 FTA New Starts Criteria which were published in the Federal Register in December 1996. Effective for the FY 1999 Report on Funding Levels and Allocation of Funds for Transit Major Capital Investments, land use will be included as an evaluative criteria for new starts projects.
Ten projects in the preliminary engineering (PE) stage participated in the voluntary pilot assessment. These include: Dallas North Central, Kansas City Southtown, Miami East-West, Miami North 27th Avenue, New Orleans Canal Streetcar, Orlando I-4 Central Florida, Portland South/North, San Diego Mid-Coast, San Francisco Bayshore, and Washington Metrorail to Largo. Information obtained from these projects is briefly summarized in the "Other Factors" section of the project profiles in this report. The short summaries provide information on current and anticipated growth rates in the corridor, policies proposed or in place in the corridor in support of transit-oriented development, pedestrian oriented development, parking management, zoning, and joint development. FTA is reviewing this year's pilot effort and developing recommendations for next year's application of the assessment of land use policies and conditions.
(1) The new start criteria do not apply where (a) the project was in preliminary engineering or final design on January 1, 1987; (b) the project is located within an extreme or severe nonattainment area, is a transportation control measure as defined in the Clean Air Act, and is required to carry out an approved State Implementation Plan; (c) Section 5309 New Start funding accounts for less than $25 million; or (d) Section 5309 New Start funding accounts for less than one third of the total cost of the project or an appropriate program of projects. While such projects need not satisfy Section 5309(e) to be eligible for funding, they must compete for funds with other eligible projects.