New Starts Rating & Evaluation

Number C-03-05

New Starts Rating & Evaluation (PDF)

March 9, 2005

Dear Colleague:

I am writing to advise you of a change the Federal Transit Administration (FTA) plans to make to the New Starts rating and evaluation process this year, and to seek your input and advice regarding several other potential changes.

As you know, over the last several years FTA has worked closely with project sponsors to implement a rigorous risk management program to improve proposed New Starts projects and to ensure they can deliver on cost, schedule and ridership promises. For some time now, we have heard from project sponsors, transit stakeholders, and oversight agencies like the Inspector General (IG) and Government Accountability Office (GAO) that modifications should be made to some of the technical aspects of the project rating system.

In response to concerns raised by Congress and the IG, as well as GAO’s views regarding changes to FTA policies, please be advised that, as a general practice, the Administration will target its funding recommendations in FY 2006 and beyond to those proposed New Starts projects able to achieve a “medium” or higher rating for cost-effectiveness. We are committed to working with every project sponsor to help you achieve this cost-effectiveness goal by identifying cost reductions, project modifications, value engineering opportunities, and other ways to improve the cost-effectiveness of your proposed project. Our objective is to help you effectively and efficiently address the transportation issues in your community.

Additionally, I want to share with you the following potential changes that are under consideration:

  1. Adjusting the cost-effectiveness rating thresholds to reflect the impact of inflation, potentially on a regional basis.
  2. Permitting the use of a 2030 planning horizon, as State and Metropolitan Planning Organizations revise the time horizons of their long-range transportation plans.
  3. Adjusting annualized capital costs to reflect standard cost categories and revised useful life assumptions, consistent with recently updated useful life estimates
  4. Permitting the use of modal constants in the travel forecasting models of communities proposing new modes of transit in order to reflect demonstrated consumer preferences.
  5. Excluding “soft costs” (such as administrative expenses, costs related to the required Before and After Study, and, potentially, start-up and testing costs) from the calculation of cost-effectiveness, to better focus this measure on the infrastructure investment costs of each project.

Please submit any written comments you may have on these five potential changes no later than April 1, 2005, by addressing your comments to DOT DMS Docket Number FTA-2005-20585, using any of the following methods:

Whichever method you choose for submitting comments, please be sure to address them to DOT DMS Number FTA-2005-20585.

For access to the docket to read background documents or comments received, go to at any time, or to Room PL-401 on the plaza level of the Nassif Building, 400 Seventh Street, S.W., Washington, D.C., between 9 a.m. and 5 p.m. Monday through Friday, except Federal holidays. You can access the docket for this Dear Colleague letter by inserting the five-digit docket number into the DMS “quick search” function.

Finally, although we are not yet ready to move forward, you should also be aware that we are examining ways that we can more accurately capture the congestion relief benefits of New Starts projects, as well as the effects of the project on land use and economic growth. We may contact you to request your assistance in testing some options for these measures in the coming months.

We appreciate your continued support of our efforts to make the New Starts program a model for local, State, Federal and private sector partnerships in America. I believe that, together, we have made great progress over the last three years, and I look forward to working with all of you to continue to demonstrate transit’s valuable contribution to the mobility and economic vitality of our communities.


Jennifer L. Dorn