TCRP Oversight Project Selection Committee Meeting - Woods Hole, MA


06-14-08

REMARKS FOR
SHERRY LITTLE
DEPUTY ADMINISTRATOR

FEDERAL TRANSIT ADMINISTRATION

TCRP OVERSIGHT PROJECT SELECTION COMMITTEE (TOPS) MEETING
WOODS HOLE, MA
JUNE 14, 2008

On behalf of President Bush and Transportation Secretary Mary Peters, I want to welcome y’all to the annual TCRP Project Oversight Selection Committee meeting.

I want the new TOPS Committee members. . . We’re so glad to have you on board, and I’m sure the committee will benefit from your expertise.

Thank you to the National Academy of Sciences for hosting this meeting once again in gorgeous Woods Hole . . .

Cape Cod’s beauty may be everlasting, but at FTA, things do change now and again. . .

So let me acknowledge some folks who are taking on new responsibilities. . .

First, though he’s not here with us today, we’re so grateful to Ron Hynes for all the years of service he’s give to FTA in our research office, most recently as Acting Associate Administrator. . . .

Ron worked tirelessly to improve oversight, implement important programs like our national fuel cell bus demonstration, and complete our research program plans. . . Ron is moving to the Federal Railroad Administration, and we wish him great success there.

Ron’s successor. . . who is here. . . is the dapper and highly capable Vince Valdes. . . In his 25 years as a senior manager in the public and private sector—the last six with FTA—Vincent has demonstrated a clear ability to lead change and innovation in transportation research, urban and regional planning, engineering research, neighborhood economic development, environmental protection, and international development. . . .

We know Vince is going to accomplish great things on the research front, and we’re glad to have him in this position. . . .

I want to acknowledge Kathryn Waters of APTA and Bob Skinner,  for all of the fantastic work they do, as advocates for transit research.

And to all the transit agency general managers who are with us today – thank you for that you’ve done to help to boost transit ridership to its highest level since the late 1950s. . . .

Finally, I want to give a shout-out to the business and consulting folks here today. . . We need y’all to help us tap into the right technologies. . . and creative financing. . . so that we can continue to build and invest in the nation’s transit infrastructure.

Let’s talk about funding for a moment. . .

FTA is once again awarding $9.3 million to Transit Cooperative Research Program for FY08. . . . The good new is these funds will be available by or before the end of this month.

Vince will fill y’all in later about our FY09 budget request.

Y’all have done a terrific job using available resources wisely  -- choosing and funding projects that are going to make a real difference to transit operators and riders in the long-run. . .

We’re very excited about these initiatives. . .

This year, for example, y’all have chosen 5 projects. . .

One looks at methods for evaluating the economic impacts of transit projects. . . This is so important!  We must have really good data to make the case to Congressional appropriators, for transit funding.

Another new project examines ways to operate street-level light rail transit at higher speeds. . . This is also important. . . . Now more than ever, we’ve got to find ways to make transit attractive to current and future riders.

We’re still reaping benefits from projects that TOPS selected last year. . .

For example. . . a project on managing capital costs of major federally funded public transportation projects is very useful to our risk assessment process. . . It provides the data we need to establish contingency targets in risk assessments. . .

And TCRP’s work on the economic benefits of coordinating human service transportation and transit services has been used to make the case for our very forward-looking Human Service Coordination Initiative . . .

This effort brings a variety of public social service and transportation providers together, to figure out the best ways to meet the mobility needs of rural and low-income folks, and people with disabilities.

I could mention so many more great research projects that are having a real impact. . . but I know you’ll have a chance to discuss them, later today.

None of this would be possible if y’all didn’t step up to the plate and volunteer your time to the various research committees. . . Thank you for doing that.

Now, let me put in a plug for FTA’s latest research agenda. . .

We’ve got 7 research proposals we’re submitting to TOPS for consideration. . .

One of the most important, in our view, involves risk assessment. . . 

This may be a bit controversial, but it’s key to effective cost management. . .

Quite frankly, the persistent underestimation of capital costs for major public transportation projects around the country has raised public scrutiny of the industry’s ability to estimate, manage, and contain costs.

Helping the industry get a better handle on this is a strategic priority for FTA  --  to ensure that we’re investing our limited resources in the projects likeliest to succeed. . . and avoid cost-overruns as much as possible. . . .

There’s no question that research is a very important tool for unlocking the potential of transit systems  --  leading to greater safety, efficiency, and cost savings. . .

But even the most creative research can only take us so
far. . .

Our national transit and transportation infrastructure is facing some serious challenges  –  and we’ve got to address them, urgently, if we hope to apply what we learn from our research.

The truth is, we’ve reached a tipping point in transit . . .  and we cannot afford to continue with business as usual. . .

It’s getting tougher and tougher to identify reliable funding for complex transit projects. . .

As you probably know, we face a projected $3 billion shortfall in the Highway Trust Fund account  --  our principle source of funding for transportation and transit projects. . .

Many people want to see a big gas-tax hike to plug the gap. . . but this is not a panacea. . .

As gas prices go up, people drive less  --  and they drive more fuel-efficient cars. . .

So there are incentives working against generating more revenue through fuel taxes. . .

Meanwhile, prices for commodities such as aluminum and concrete continue to escalate. . .which in turn is raising the price tag on complex, capitally intensive transit projects. 

Given the funding challenges we face, we’re supporting public-private partnerships as a means of identifying alternative, sustainable funding sources for capital transit projects.

I’m sure many of you are familiar with the basic concept. . .

The goal of these partnerships is for public agencies that sponsor transit projects to contract with private partners who design, construct, finance, operate, and maintain transit facilities --  from rail and bus stations to parking garages.
 
These arrangements offer many potential advantages, by supplementing public funding with private equity and debt  . . .   transferring long-term financial risks to the private sector  . . .  and speeding up project construction and delivery, which in turn may reduce costs on some transit projects. FTA is sponsoring pilot public-private partnership projects in Houston, Denver, and Oakland. . .

This is especially important to me. . . . I wrote the provision for this pilot program into our authorizing legislation, SAFETEA, a few years ago,  to ensure that we begin to think outside the box on how to get more transit projects up and running.

According to Ernst & Young, public-private partnerships are here to stay, and may well be the only viable way for governments to reach their infrastructure development goals.

If you’re interested in getting up to speed quickly on public-private partnerships, then consider attending one of three workshops on this, that we’re co sponsoring with the National Council for Public-Private Partnerships over the next few months. . .

Believe me, this is a great event for y’all to consider attending. . .   I came here directly from the first of these workshops, in Denver. . .

My friend Cal Marsella, GM of Denver Regional Transit was there. . . and he’s with us today. . . I’m sure Cal will back me up in saying it was a big success. . .

Our website, fta.gov, has all the information on these events. . . or you can just call our office.

Figuring out how to fund transit is very important to us  --  not simply because we need additional money to build the systems our country needs to keep people mobile. . . but because we need money to maintain them over time.

A top priority for us at FTA is keeping our transit systems in a state of good repair…

Encouraging transit operators to build new capacity, without providing for aging transit infrastructure, is not a winning long-term strategy.

For our New Starts grantees, we’re paying extra attention to how they demonstrate that sufficient local resources are available to preserve the quantity and quality of existing transit service.

Think of it this way: You wouldn’t expect a bank to approve a loan for a big new addition on your house, if your house is falling down around you – if the roof is leaking, the windows are rotting, and so forth. . .

We’ve got to be good stewards of our public and private transit funds  --  and make sure that all stakeholders  --  federal, state, and local  -- are held accountable for their investment decisions.

That’s why we’re making it a priority to help the transit industry get a better handle on cost and ridership information for our New Starts projects.

Our New Starts projects, as many of you know, often involve large, complex, multi-year investments in major rail and bus programs that have an enormous impact on the communities they serve – and on local and regional economies where they operate.

It’s an historical fact that, typically, the local sponsors of New Starts projects tend to over-estimate ridership forecasts, and under-estimate project costs.

This happens systematically --  not just once in awhile.

Until recently, we simply hadn’t done enough of a detailed analysis to determine the reasons for this gap.

This is an issue I’m very familiar with  --  going back to my days on the Banking Committee.

As we drafted SAFETEA, we knew that this was an area that had to be addressed. After all, you can’t manage what you can’t measure. . .

And if FTA is not sure whether grantees are making accurate forecasts, then it’s difficult to know whether the right investment decisions are being made.

So we wrote several provisions into SAFETEA to improve New Starts cost and ridership estimates, collect more cost data, study contractor performance, and develop before-and-after studies of New Starts projects.

I want you to know that we’ve finally gotten some good predicted-vs-actual data from 2003 and 2007. . .

The industry’s ability to accurately predict ridership is almost twice as good now as it was in 1990. . . but we still have a ways to go, to make these forecasts more accurate.

The final issue I want to address involves reauthorization. . .

Everywhere I go, people come up to me with questions about how FTA’s funding levels and programs will be affected by the legislation that replaces SAFETEA, which is set to expire at the end of 2009 . . .

I can’t tell you, at this point, what reauthorization will look like, exactly. . . . But I can tell you that I expect the areas I just mentioned  --  public-private partnerships. . . keeping transit systems in a state of good repair. . . and projecting ridership levels . . . to be addressed in the new legislation. . . .

The reauthorization effort could not be more important in terms of the future of transit in America. . . . and we are thinking very hard about it at FTA and throughout DOT.

And of course, I am hopeful that a robust research agenda will be supported in reauthorization . . . as a tool to help us strengthen transit. . . and make the most of our investments.

I think it’s essential that all of us in the public and private sectors work closely with federal, state, and local officials to find the answers we need to solve our transportation problems. . .

To identify sufficient resources that will enable us to invest, and re-invest, in a national transit infrastructure that is second to none. . .

And to leverage the researcher’s ability to discover and test new ways of building, operating, and maintaining transit assets  --  and measuring their impact on our economy and our mobility. . .
 
Clearly, it’s time to get back to the drawing board and think long and hard about what role transit can play in helping to address the problems we face  --  and provide all Americans with the mobility and access to the transportation services they require.

I’m confident that the TOPS Committee will continue to be part of the solution here. . .

Your contributions have been. . . and will continue to be. . . invaluable to all of us.

Please know that we at FTA will continue do everything we can to support your continued success!

I’ll leave you with a quote by Jack London – the author of White Fang and other classics:

“Don’t loaf and invite inspiration. Light out after it with a club!”

I’m sure that all of you here today have come prepared to inspire those around you  --  and to be inspired in turn.

Thank you.