New Starts Allocations and Recommendations

The President's budget for FY 2004 proposes that $1,514.92 million be made available for New Starts under Section 5309. After subtracting amounts for FTA oversight activities proposed in the budget and approved by P.L. 107-87 [1] and for ferry capital projects in Alaska or Hawaii, a total of $1,368.28 million remains available for projects. Of this amount, a total of $994.26 million is proposed for allocation among 19 projects with existing Federal commitments. An additional $139.02 million is proposed to be allocated among three projects for which funding commitments are currently pending, and $235.00 million is proposed to be allocated among four projects that are expected to be ready for funding commitments before the end of FY 2004 (i.e., September 30, 2004). Complete descriptions of these projects can be found in Appendix A.

Table 2 summarizes the recommendations for FY 2004 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 2002 and prior year funds that have been obligated to each project. The third column shows the amount of funds requested for FY 2003 in the President’s budget request to Congress. The fourth column shows the FY 2004 funding recommendations contained in the President’s budget request, and the fifth indicates the amount of out-year funding remaining for those projects currently 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 New Starts funds.

A 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; defines 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 limitation on the amount of that Federal support.

Thus, an FFGA limits the exposure of FTA and the Federal government to cost increases that may result if project design, engineering and/or project management is not adequately performed at the local level. 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 project management, design and engineering have been performed. FTA is not directly involved in the design and construction of New Starts projects.

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).

Existing Federal Funding Commitments

Nineteen projects have an existing FFGA that commits FTA to provide a specified level of major capital investment funding. These projects will require a total of $994.26 million in FY 2004. The status of these projects and the individual funding recommendations for FY 2004 are described below. All of these projects have been authorized by Congress, and all were either under an FFGA prior to TEA-21 or have been rated as “Recommended” or higher at the time the FFGA was issued.

An additional seven projects have an existing FFGA for which the Federal funding commitment will be fulfilled if the FY 2003 Congressional appropriation adheres to the President’s FY 2003 Budget Request. These projects will not require additional funds in FY 2004, if that is the case. They are listed separately below.

[1] Section 319 of P.L. 107-87, Department of Transportation and Related Agencies Appropriations Act, 2002, states that, “beginning in fiscal year 2002 and thereafter, the Secretary may use up to 1 percent of the amounts made available to carry out 49 USC 5309 for oversight activities under 49 USC 5327.”