APTA Legislative Conference - Washington, DC


03-12-07

REMARKS
ADMINISTRATOR JAMES S. SIMPSON
FEDERAL TRANSIT ADMINISTRATION
APTA LEGISLATIVE CONFERENCE
WASHINGTON DC
MARCH 12, 2007

Thank you so much for that kind introduction, Bill Millar. It is a great pleasure to be at another APTA conference, speaking before the leaders of the public transportation industry. The last time that I was here, I had the opportunity to meet Leonard Ronas. Leonard informed me that he had attended fifty APTA conferences in a row. When I asked him why he would attend so many conferences, he replied that Bill Millar had told him it was the only way he could get a Full Funding Grant Agreement!

While it is an exaggeration that Leonard would have to attend fifty conferences to get an FFGA, his story is an important one because it demonstrates the need to continuously examine and improve our customer service, our policies, and our processes so FTA can better serve our customers. I am going to spend a few minutes discussing some improvements we are making to our New Starts program, but first I want to discuss some larger improvements happening at FTA.

The last time I was here, I shared my commitment to what I call "entrepreneurial government,” which means drawing on the best practices of both the public and private sectors in order to continuously improve FTA.  It also means being accountable and putting the customer at the top of the organization.

Since then many of you have heard me talk about what an outstanding agency FTA is.  Unfortunately for some of you, you have heard me talk about this many times. Coming into an agency where employees are talented and energized posed an interesting challenge for me. I asked myself, “How can I leave this organization in better shape than when I arrived?” I wanted my stewardship to be known for its legacy of added value. So, I began to search for innovative ways to improve an already great organization.

I wanted to know what we at FTA could do to improve our performance on the critical factors that drive success. So, I searched for a way to cost effectively gain an outside perspective on FTA’s strengths and opportunities for improvement. One nationally acclaimed program, which is already well known in the private sector, stood out to me.  During November of 2006, we decided to apply for the Malcolm Baldrige National Quality Award. Malcolm Baldrige, President Reagan’s Secretary of Commerce, developed principles to make American industries more competitive in the global economy not by downsizing or reducing pay for employees, but by focusing on continuous improvement.

The application process for the Baldrige Award includes a comprehensive assessment that will provide a rigorous, objective, external view of FTA and give us an opportunity to utilize proven business criteria that focus on measuring ourselves against “best-in-class” companies. 

When I first announced the decision to apply for the Baldrige Award to the FTA family, I was overwhelmed by the response. Within hours, my inbox was overflowing with emails from employees from all different grades, offices, and expertise who eagerly offered their time and input to make FTA an even better organization through the Baldrige process. Since the kickoff, we have taken surveys and formed committees and subcommittees. This has led to a sense of momentum and friendly competition at FTA that many of you may have detected while interacting with us in the last few months. I am proud to say that this is just the beginning as we at FTA continue to implement the Baldrige principles.

The Baldrige Process is impacting every aspect of how FTA conducts business. The New Starts Program is no exception. FTA has been taking a hard look at the New Starts process, starting even before SAFETEA-LU was enacted in August 2005.

As many of you know, in June 2006, FTA proactively commissioned Deloitte Consulting, LLC, to do a wide-ranging assessment of the New Starts program, which included document review, case studies, and over 60 interviews with our stakeholders—including project sponsors, Congress, FTA staff, and the Government Accountability Office.  That assessment came to an end in mid-February, and my staff and I are in the process of digesting the findings from the study.

Last month, I received a letter from APTA’s Bill Millar with several suggestions to improve the New Starts program.  I agree with many of them and look forward to continuing to improve the New Starts program. 

There is considerable overlap between FTA’s own perception of the program, the Deloitte recommendations, and APTA’s suggestions.  

Certainly, the Deloitte Study confirmed a lot of things that we already know:

• That the development of New Starts projects is a highly complex process with many stakeholders, with inherently conflicting opinions among our stakeholders.
• That New Starts is generally perceived as a good program.
• That FTA’s New Starts staff is knowledgeable, dedicated and professional,  BUT………
• The process takes time and staff resources are stretched thin.

While I am very proud of what FTA has accomplished with the program, there is always room for improvement: especially in the areas of:

• Clearer definition of requirements,
• More consistent application of policies,
• Relief from unnecessary reporting, and
• Smoother internal FTA processing of applications. 
There are several shorter-term improvements that we can make, and, in fact, are already in the process of implementing.  I don’t have a lot of time, but I want to give you a few examples:

In February 2007, we proposed the elimination of a number of reporting requirements, including the need for some projects to even report at all, under certain conditions.  Our proposal is just a first step towards a comprehensive review of how we might minimize Federal requirements associated with the New Starts program. 

We also proposed a greater willingness to consider a wider range of factors in determining a project’s justification rating.  For example, we proposed the allowance of modal constants – that is, user benefit values for some of the immeasurable attributes of guideway transit – things like reliability, quality of the ride, and service branding – in the calculation of project cost effectiveness.  We are also looking at a broader range of project benefits: from economic development to congestion pricing to the unique “case” for the project. In addition, for projects accepted into the Penta-P program, we intend to allow costs associated with private investment to be excluded in their calculation of cost effectiveness.

Finally, next month, we hope to issue a proposed regulation for the New Starts and Small Starts program.  I am unable to go into much detail, but I can tell you that I think you are going to like some of our ideas on cost effectiveness and project justification. 
The Deloitte Report echoed what I hear over and over when I speak with the industry – that “New Starts guidance lacks sufficient clarity and consistent implementation.” (And that’s a quote!)  Let me deliver to you this afternoon my commitment to address this concern.  Over the next few months, expect to see clearer information on project milestone approvals, risk assessments, the New Starts baseline alternative, and other aspects of the New Starts program.  Key objectives of this guidance will be a) to be clear; b) to be complete; and c) to simplify the process where possible. 

We will be making greater use of standardized schedules to track milestones and progress so each transit agency will have a better sense of next steps.  Over the long run, our goal is to be more responsive to the need for timely decision-making.

Over the next several months, you will be hearing more from FTA about how we are working to improve the New Starts process.  Our staff will be going on the road to discuss the proposed New Starts/Small Starts rule, implementation of the Deloitte Report findings, and to solicit your suggestions for improving the program. 

In order to continually improve as transit providers, we must have accountability.  Ridership provides that accountability because it gives us a measure of our performance. Ridership also serves as a litmus test for the health of the transit industry.  FTA and APTA are partners in the goal of increasing ridership. We do not want to rely on external factors, such as gas prices or congestion, to increase ridership. Instead, we are taking a proactive role in examining what transit agencies have done to successfully increase their ridership so that we can provide best practices for other agencies to follow.

Today’s award recipients substantially increased their ridership since 2003 through a variety of techniques and innovations.  Of the 34 transit agencies who submitted applications, we selected the best 12 based on the highest ridership gains and the broadest transferability of ridership initiatives to other transit agencies.  These awards not only provide an excellent opportunity to reward excellence in our industry, but also a chance to learn how we can continually improve as an industry. Congratulations to the Winners!