New Starts Allocations and Recommendations

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The President's budget for FY 2001 proposes that $1,058.40 million be made available for new starts under §5309. This represents the full amount of guaranteed funds authorized by TEA-21. After subtracting amounts for FTA oversight activities as authorized by §5327, and for other purposes specified by §5309(m)(5)(A), a total of $1,040.14 million remains available for projects. Of this amount, a total of $639.29 million will be allocated among the 14 projects with existing Federal commitments, according to the amounts specified in Attachment 6 of their respective FFGAs. An additional $105.00 million will be allocated among three projects for which FFGAs are currently pending, and $211.17 million will be allocated among 11 projects that are expected to be ready for FFGAs before the end of FY 2001 (i.e., September 30, 2001). As authorized under §5309(m)(2), the remaining $84.67 million will be made available for preliminary engineering activities, with specific funding recommendations for ten projects. Complete descriptions of these projects can be found in Appendix A.

Table 2 summarizes the recommendations for FY 2001 funding and overall funding commitments. For each project, the first column indicates the overall project rating, as described earlier in this report. The second column shows the amount of FY 1999 and prior year funds that have been obligated by each project, and the third column shows any unobligated amounts as of the end of FY 1999. The fourth column shows the amount of funds available as a result of the FY 2000 DOT Appropriations Act (adjusted for the oversight takedown). The fifth column shows the FY 2001 funding recommendations contained in the Presidentís budget request, and the sixth indicates the maximum amount of outyear funding remaining for those projects under FFGAs. Finally, the last column sums the first five columns and shows the total amount to be made available over the life of the project from Federal transit major capital investment funds.

Please note that a rating of "recommended" does not translate directly into a funding recommendation; rather, it is an indication of overall project merit. Note also that project evaluation is an ongoing process, and ratings may change as project development continues and new information becomes available. Finally, no rating is shown for projects with existing FFGAs. For those projects with existing FFGAs issued prior to TEA-21, the statutory determination of project justification was made at the time the Federal commitment was issued, under the requirements in effect at the time. Under TEA-21, §5309(e)(7) requires the Secretary to enter into FFGAs based on the ratings assigned under the new starts project evaluation process; thus, no FFGA will be issued for a project that is not rated at least "recommended." In both cases, the issuance of the FFGA represents the conclusion of the new starts evaluation process. It should be noted, however, that FTA continues to monitor projects that are proceeding under FFGAs through its project management oversight process.

Word About Full Funding Grant Agreements

Section 5309(e)(7) specifies the Full Funding Grant Agreement (FFGA) as the means by which new starts projects are to be funded. The FFGA is also the principal means used by FTA to manage the new starts caseload. FTA also has the discretion to use an FFGA in awarding Federal assistance for other major capital projects.

The FFGA defines the project, including cost and schedule; commits to a maximum level of Federal financial assistance (subject to appropriation); establishes the terms and conditions of Federal financial participation; covers the period of time for completion of the project; and helps to manage the project in accordance with Federal law. The FFGA assures the grantee of predictable Federal financial support for the project (subject to appropriation) while placing a ceiling on the amount of that Federal support.

An FFGA also limits the exposure of FTA and the Federal government to cost overruns that may result if project design, engineering and/or planning is not adequately performed at the local level. FTA is primarily a financial assistance agency; it is not directly involved in the design and construction of new starts projects. While FTA is responsible for ensuring that planning projections are based on realistic assumptions and that design and construction follow acceptable industry procedures, it is the responsibility of project sponsors to ensure that proper planning, design and engineering have been performed.

Additional information and guidance on developing FFGAs is contained in FTA Circular C 5200.1, Full Funding Grant Agreements Guidance, dated July 2, 1993, and the FTA Rule on Project Management Oversight (49 CFR Part 633).

Table 2: FY 2001 New Starts Funding Recommendations