New Starts Evaluation and Rating Process Assesses Project’s Justification and Local Financial Commitment

FTA’s current New Starts evaluation process assigns candidate projects  individual ratings for each TEA-21 criterion to assess each project’s  justification and local financial commitment. The process also assigns an  overall rating that is intended to reflect the project’s overall merit. However, some  projects rated as highly recommended or recommended may not meet  FTA’s readiness test for funding. For its New Starts report for fiscal year 2003, FTA evaluated a total of 50  projects and provided overall ratings for 31 of these projects. The purpose of the baseline  comparison is to isolate the costs and benefits of the proposed major  transit investment. FTA Proposes Four Projects for New Starts Funding in Fiscal Year 2003

FTA’s New Starts report and budget for fiscal year 2003 requests that $1.21  billion be made available for the construction of four new transit systems  and expansions of existing systems through the New Starts program (see  app. TEA-21 provided the majority of FTA’s commitment authority, authorizing  $6.09 billion in “guaranteed” funding for the New Starts program. A cap on New Starts  funds would allow more projects to receive funding but could have an  effect on specific projects that are currently being developed. For  example, based on current project cost estimates, a 60-percent cap on New  Starts funds for the 49 projects currently in final design or preliminary  engineering would result in about $500 million that could be used to fund  additional projects. Concluding Observations

Although FTA has been faced with an impending transit budget crunch for  several years, the agency will end the TEA-21 authorization period with  unused commitment authority impart because fewer projects than  expected were ready for grant agreements.
What GAO Found

Since the early 1970's, the federal government has provided a large share of the nation's capital investment in urban mass transportation. Much of this funding has come through the Federal Transit Administration's (FTA) New Starts Program, which helps pay for rail, bus, and trolley projects. The Transportation Equity Act for the 21st Century authorized about $6 billion in "guaranteed" funding for the New Starts program through fiscal year 2003. FTA's evaluation process assigns candidate projects individual ratings for project justification and local financial commitments. The process also assigns an overall rating intended to reflect the project's merit. FTA recommended four projects for funding commitments for fiscal year 2003 in its New Starts report and budget proposal. FTA evaluated 50 proposed projects for fiscal year 2003 and developed ratings for 31 of them. Twenty-seven of these projects were rated as "highly recommended" or "recommended." Although FTA has faced transit budget crunches for years, the agency will end the act's authorization period with $310 million in unused commitment authority. Proposals to limit the amount of New Starts funds would allow more projects to receive such funding, but could harm specific projects being developed and the local transportation planning process. For example, limiting New Starts funds to 60 percent of a project's cost for the 49 projects now in final design or preliminary engineering would "free up" $500 million for additional projects. However, only 20 percent of these projects plan to use New Starts funds for more than 60 percent of projected costs and would be affected by such a cap.