Under New Starts, FTA identifies and  recommends fixed-guideway transit projects for funding—including heavy,  light, and commuter rail; ferry; and certain bus projects (such as bus rapid  transit). 1). FTA Has Made Progress in Implementing SAFETEA-LU Changes, but Work Remains

SAFETEA-LU made a number of changes to the New Starts program and  FTA has made progress in implementing some of those changes. However,  FTA has more work to do to implement these changes. For example, SAFETEA-LU added economic development to the list of  evaluation criteria that FTA must use in evaluating and rating New Starts  projects and required FTA to issue notice and guidance each time  significant changes are made to the program. This program is intended to advance smaller-scale projects through an  expedited and streamlined evaluation and rating process. The July 2006 interim guidance introduced a separate eligibility  category within the Small Starts program for “Very Small Starts” projects. Small Starts projects that qualify as Very Small Starts are simple, low-cost  projects that FTA has determined qualify for a simplified evaluation and  rating process. Project sponsors identified two key issues for FTA to  consider as it moves forward in implementing SAFETEA-LU changes:  further streamline the Small Starts program and fully incorporate  economic development into the New Starts and Small Starts evaluation  and rating processes. Project Sponsors Would Like FTA to Further Streamline the Small Starts Program

In implementing the Small Starts program, FTA has taken steps to  streamline the application and evaluation and rating process for smaller- scale transit projects, as envisioned by SAFETEA-LU. According to our  analysis of the number and types of requirements for the New Starts and  Small Starts application processes, the Small Starts process has fewer  requirements. Specifically, FTA currently  assigns a weight of 50 percent each to cost-effectiveness and land use to  calculate a project’s overall rating; the other four statutorily-identified  criteria, including economic development, mobility improvements,  operating efficiencies, and environmental benefits, are not weighted. However,  FTA officials told us that few project sponsors submit information on their  projects’ economic development benefits for consideration as an “other  factor.” We previously reported that FTA’s reliance on two evaluation  criteria to calculate a project’s overall rating is drifting away from the  multiple-measure evaluation and rating process outlined in statute and  current New Starts regulations. Specifically, by not weighting economic development, the project  sponsors and industry groups said that the evaluation and rating process  does not consider an important benefit of some transit projects. FTA Officials and Project Sponsors Attribute Changes in the Size and Composition of the New Starts Pipeline to Different Factors

The number of projects in the New Starts pipeline has decreased since the  fiscal year 2001 evaluation and rating cycle, and the types of projects in the  pipeline have changed. The Number of Projects in the New Starts Pipeline Has Decreased, and the Types of Projects Have Changed

Since the fiscal year 2001 evaluation cycle, the number of projects in the  New Starts pipeline—which includes projects that are in the preliminary  engineering or final design phases—has decreased by more than half, from  48 projects in the fiscal year 2001 evaluation cycle to 19 projects in the  fiscal year 2008 evaluation cycle. 2). FTA officials cited their increased scrutiny of  applications to help ensure that only the strongest projects enter the  pipeline, and said they had taken steps to remove projects from the  pipeline that were inactive, not advancing, or did not adequately address  identified problems. 3). Our survey results also reflect many of the reasons for the decline in the  New Starts pipeline. Future Demand for New Starts and Small Starts Programs Expected

Our survey of project sponsors indicates that there will be a future  demand for New Starts, Small Starts, and Very Small Starts funding. Although the project sponsors we surveyed indicated  that they were considering a range of project type alternatives in their  planning, the most commonly cited alternatives were bus rapid transit and  light rail. In addition, of 28 project sponsors that intend to seek Small  Starts or Very Small Starts funding for their planned projects, 13 have not  previously applied for New Starts, Small Starts, or Very Small Starts  funding.
Why GAO Did This Study

Through the New Starts program, the Federal Transit Administration (FTA) identifies and recommends new fixed-guideway transit projects for funding--including heavy, light, and commuter rail; ferry; and certain bus projects. The Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU) authorized the New Starts program through fiscal year 2009 and made a number of changes to the program, including creating a separate program commonly called Small Starts. This program is intended to offer an expedited and streamlined evaluation and rating process for smaller-scale transit projects. FTA subsequently introduced a separate eligibility category within the Small Starts program for "Very Small Starts" projects. Very Small Starts projects are simple, low-risk projects that FTA has determined qualify for a simplified evaluation and rating process. This testimony discusses GAO's preliminary findings on (1) FTA's implementation of SAFETEA-LU changes to the New Starts program, (2) the extent to which the New Starts pipeline (i.e., projects in the preliminary engineering and final design phases) has changed over time, and (3) future trends for the New Starts and Small Starts pipelines. To address these objectives, GAO surveyed 215 project sponsors and interviewed FTA officials, 15 project sponsors, and 3 industry groups. Our survey response rate was 77 percent.

What GAO Found

FTA has made progress in implementing SAFETEA-LU changes, but more work remains. Project sponsors frequently identified two key issues for FTA to consider as it moves forward in implementing SAFETEA-LU changes: (1) further streamline the Small Starts program and (2) fully incorporate economic development as a criterion in the New Starts and Small Starts evaluation and rating processes. According to our analysis of the number and types of requirements for New Starts and Small Starts application processes, the Small Starts process has fewer requirements. However, project sponsors said that FTA should further streamline the process by, for example, eliminating requests for duplicate information requested in required worksheets. SAFETEA-LU added economic development to the list of project justification evaluation criteria that FTA must use to evaluate and rate projects. However, FTA currently assigns a weight of 50 percent each to cost-effectiveness and land use in calculating a project's overall rating--the other 4 statutorily identified criteria, including economic development, are not weighted. We previously reported that FTA's reliance on two evaluation criteria to calculate a project's overall rating is drifting away from the multiple-measure evaluation and rating process outlined in statute. Further, without a weight for economic development, project sponsors say, the evaluation and rating process does not reflect an important benefit of certain projects. FTA officials said they are currently working to develop an appropriate economic development measure as part of their upcoming rulemaking. The New Starts pipeline--that is, projects in different stages of planning--has changed in size and composition since the fiscal year 2001 evaluation and rating cycle, and a variety of factors have contributed to these changes. Since then, the number of projects in the New Starts pipeline has decreased by more than half. Additionally, the types of projects in the pipeline have changed during this time frame, as bus rapid transit projects are now more common than commuter or light rail projects. FTA officials attributed the decrease in the pipeline to their increased scrutiny of applications to help ensure that only the strongest projects enter the pipeline, and to their efforts to remove projects from the pipeline that were not advancing or did not adequately address identified problems. Project sponsors GAO interviewed provided other reasons for the pipeline's decrease, including that the New Starts process is too complex, time-consuming, and costly. Our survey results reflect many of these same reasons for the decline in the pipeline. Despite these concerns, GAO's survey of project sponsors indicates future demand for New Starts, Small Starts, and Very Small Starts funding. The sponsors GAO surveyed reported having 137 planned projects and intend to seek New Starts, Small Starts, or Very Small Starts funding for almost three-fourths of these projects. Project sponsors GAO surveyed also reported considering a range of project type alternatives in their planning. The most commonly cited alternatives were bus rapid transit and light rail.