New Starts/Small Starts Program APTA Rail Conference San Francisco, CA June 5, 2008.
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Transcript of New Starts/Small Starts Program APTA Rail Conference San Francisco, CA June 5, 2008.
New Starts/Small Starts Program
APTA Rail ConferenceAPTA Rail ConferenceSan Francisco, CASan Francisco, CA
June 5, 2008June 5, 2008
2
Topics
• Overview of the Program • New/Small Starts Project Planning &
Development• New/Small Starts Evaluation and Funding• Outreach
3
FTA Aspirations the Program
• Goal: Fund meritorious projects
• Management objectives:– Make decisions with
reliable information on project benefits and costs
– Treat all projects equitably across the US
– Facilitate communication between FTA, transit industry and Congress
4
How FTA Meets Its Goals
• Sound and rigorous management of the program• Promote - and assist in - the development of
reliable information on costs and benefits• Transparent evaluation process • Local decisions, project ratings, and funding
recommendations are based on the best information available to both the public and decision-makers
5
Long-standing Legislative Requirements for Funding
• Alternative analysis• Cost effectiveness• Local financial commitment
6
Key Program Principles
• Information used evaluations must properly reflect costs and benefits of the project - THIS IS HARD!
• FTA evaluations are mode-neutral• Purpose of each project development phase
should be accomplished before progressing to the next
• Projects accepted into PE/PD are worthy of funding
7
Principle: Proper Identification of Project Benefits and Costs
• Maintain policy variables between project and baseline alternative with respect to:– Land use– Parking costs– Transit service frequencies and coverage– Transit fare– Transit service levels outside study corridor– Highway networks
8
Principle: Mode-neutral
• Credit ridership attractiveness to those attributes that riders value, not mode per se
• Credit likelihood of economic development to those factors associated with it: developability of land, economic climate, plans and policies and accessibility.
9
Principle: Accomplish Purpose of Development Phase Before Progressing
• Systems planning: corridor identification• Alternatives analysis: mode and alignment• PE: final scope/cost, completion of NEPA,
financial plan commitments• Final design: construction documents
10
Principle: Projects Accepted into PE Are Worthy of Funding
At completion of AA minimize uncertainties that affect:
• Alignment or mode• Capital cost• Transportation benefits• Financial plan• Others that could significantly affect project
viability
11
New Starts/Small Starts Funding: Supply and Demand
• Demand:– 18 New Starts projects in PE and Final Design– 16 Small Starts projects in PD– Total cost of pipeline: >$22.6 billion, $10.3 billion in
New Starts funding– FTA tracking >100 planning studies considering major
transit capital investments
• Annual funding– New Starts: $1.4+ billion – Small Starts: $200 million
12
SAFETEA-LU Highlights for Alternatives Analyses
• Before and After Study– Required for both New Starts and Small Starts project – compares
cost and ridership forecasts with actual numbers 2 years after revenue operations begins
• Before and After Study Report– Required annually to Congress documenting results of B&A studies
• Contractor Performance Assessment Report– Required annually to Congress citing contractor forecasts
• Incentives awards – Allows more federal funding if actual ridership is at least 90% and
cost no more than 110% of forecasts made during alternatives analysis
13
Eligibility: New Starts
• New fixed guideway systems and extensions • New Starts funding > $75M or costs ≥ $250m• Fixed guideway is established by any of the
following characteristics:– Rail; – Separate right-of-way for the use of public
transportation or high occupancy vehicles; or – Catenary
14
Eligibility: Small Starts
• Cost criteria– Total cost <$250 million– Small Starts share < $75 million
• Scope criteria– Project has a fixed guideway for 50 percent or more of its
length during peak periods, or– Non-fixed guideway project in a corridor including ALL of the
following:- Significant transit stations- Traffic signal priority or pre-emption- Low floor buses or level boarding- Premium service branding- 10 min peak/15 min off-peak headways at least 14 hours a
day
“Exempt” projects exist only until a new rule is published
15
Eligibility: Very Small Starts
• Small Starts criteria for cost and scope• Plus additional eligibility criteria:
– Total cost under $50 million– Cost per mile < $3 million per mile, excluding rolling
stock– (Existing weekday riders over 3,000)
16
Small Starts/Very Small StartsEligible Applicants
• Any public body is eligible to apply for Small Starts funds
• If the applicant is not the operator:– The small starts application must demonstrate how the
project will be operated and maintained– Project sponsor must provide an executed operating
agreement before a PCGA can be finalized
17
FTA
Senate AuthorizingMajority/Minority
Senate AppropriationsMajority/Minority
House AuthorizingMajority/Minority
House AppropriationsMajority/Minority
Office of the Secretary OMB
White House
The New Starts Environment
Individual Senate and House Members
150Projects15 FFGAs, 34 FD/PE/PD, 100 AA
InspectorGeneral
Govt Accountability
Office
Press
New Starts Planning and Project Development
19
New Starts Project Development Process
• Project Development: Typically 6-12 Years
Alternatives Analysis 1-2 years
Preliminary Engineering
2-3 years 3-7 years
Operation
FTA Approval Required for
Full Funding Grant Agreement (FFGA)
~ 100 AA Studies
12 PE Projects
6 FD Projects
FTA Approval Required
FTA Approval Required
15 FFGA Projects
ConstructionFinal Design
20
Length of Project Development – LPA to Opening
R2 = 0.0002
0
2
4
6
8
10
12
14
1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008
Year of Opening
Pro
ject
Dev
elo
pm
ent
Per
iod
(Y
ears
)
21
Key Decisions for Each Phase of Project Development
• Systems planning: priority corridor• Alternatives analysis: mode and alignment• Preliminary engineering: final scope/cost,
completion of NEPA, financial plan• Final design: construction documents• Full Funding Grant Agreement
– FTA: funding– Project sponsor: delivery of the project
22
Planning and Project Development
Alternatives Analysis
Preliminary Engineering
Select LPA
FTA Approval to Start PE
FTA Approval to Start Final Design
System Planning
Decisions
• Mode, general alignment• Financial plan
Decisions
• Needs• Policies• Priority corridor(s)
Decisions
• Refinements to LPA• Final scope and cost• Complete NEPA• Implement financial plan
23
History of Alternatives Analysis
1970s • Initial UMTA Policy Statements
1980s • Rating system and technical guidance created• AA became statutory requirement• FTA staff closely involved in AAs• FTA had grasp of issues at decision-points
1990s • Major Investment Study (MIS) era• FTA had little involvement in or awareness of AA studies• FTA focused on projects in PE and Final Design
2000s • FTA, Congress focus on funding best projects• Emphasis is on settling planning questions before PE• FTA involvement in AA renewed
24
Alternatives Analysis:Guiding Principles
• Local process, local decisions• Early and ongoing participation by a wide range of
stakeholders• Sufficient level of analysis is necessary to select a mode
and general alignment• Documentation and presentation of key study
components• Development of alternatives that isolate the costs and
benefits of capital investment in guideways
25
Alternatives Analysis: Key Elements
• Identification of corridor problems, project “purpose and need,” and goals and objectives
• Development of a range of alternatives that address causes of transportation problems
• Analysis of costs, benefits, and impacts of alternatives• Refinement of Alternatives• Evaluation of alternatives
26
Useful FTA Reviews during AA
• Scope of work• Initiation package• Technical framework• Technical results• Final report (AA report or AA/DEIS)
27
Requirements for FTA Approval into Preliminary Engineering (New Starts)
• Completed alternatives analysis• No outstanding planning issues remain• Locally preferred alternative adopted into fiscally
constrained long range plan• Projected New Starts evaluation measures confirmed• “Medium” or higher rating for project
– at least medium rating for both project justification and local financial commitment
• Sponsor demonstration of technical capacity
28
FTA Suggestions to Expedite PE Approval Process
• Involve FTA in the alternatives analysis study early on• Permit FTA to review AA study products• Develop a defensible TSM alternative (and get FTA
concurrence) as part of the study; don’t wait until the end to seek approval for what will become New Starts baseline alternative
• Inform FTA of intent to request entry into PE well in advance of formal request
• Do not submit formal request until all readiness thresholds and FTA approvals/findings have been met
29
Preliminary Engineering
What It Is
Work necessary to develop a firm scope and cost estimate with appropriate contingencies: Finalize station locations and configuration Yard and shop location Alignment Park and ride size and configuration Number of vehicles and peak capacity needs
Work necessary to complete the environmental requirements
Work necessary to firm up funding commitments
30
Preliminary Engineering
What It Is NOT
Just engineering
Work necessary to complete 30% of design
Work necessary to develop a preliminary cost estimate that likely will increase during final design as project is better defined
An indication of likely New Starts funding
31
Responsibilities of Project Management Oversight Contractors (PMOCs)
Serve as extension of FTA staff: - project management - construction management - project sponsor technical capacity
Monitor project progress: - schedule and budget - conformance with design criteria - construction to approved specifications
Provide technical guidance to grantee
32
Requirements for FTA Approval into Final Design
• Completed NEPA process (ROD or FONSI)• Approved Project Management Plan (PMP)• Approved Rail and Bus Fleet Management Plan• Address Railroad Right-of-Way (ROW) Issues• Establish Process for Real Estate and ROW
Acquisition• “Medium” or Higher Project Rating
– At least Medium rating for both Project Justification and Finance (including commitment of 50% of non-5309 funds)
33
What is a Full Funding Grant Agreement (FFGA) ?
• Formal Agreement signed by FTA and Grantee following detailed review by DOT, OMB and Congress
• Agreement on Project Scope, Budget, and Schedule
• Terms and Conditions of Federal Participation• Multi-year Funding Commitment (subject to
Congressional Appropriations)• Caps Federal Section 5309 New Starts funds
34
Full Funding Grant Agreement
• To receive an FFGA a project must:– Be Authorized in Law– Complete the Planning, Project Development, and
NEPA Processes– Meet Project Readiness Requirements (techinical
capacity, firm and final cost estimate and funding)– Receive a “Medium” or higher overall rating– Receive a “Medium” or higher cost effectiveness rating– Meet all other Federal Requirements
35
Significance of FFGA
Historically, 85% of New Starts Funds Appropriated for FFGAs and Projects with “Medium” or Higher Ratings
All Projects Eventually Receive 100% of Total New Starts Funding in FFGA
Majority of Projects Receive New Starts Funding according to Annual Schedule in FFGA
Practical Limits on Total New Starts Funding and Annual Schedule for Individual Projects
36
Practical Limits for New Starts Funds
• Consider other projects in the region and their request for New Starts funds
• Assume no more than 50 percent in New Starts funding
• Historical maximum New Starts funds per project: $700M total, $100M per year (NYC region is exception)
37
What is a Project Construction Grant Agreement (PCGA)? (Small Starts)
• Formal Agreement signed by FTA and Grantee following detailed review by DOT, OMB and Congress
• Agreement on Project Scope, Budget, and Schedule
• Terms and Conditions of Federal Participation• Multi-year Funding Commitment (subject to
Congressional Appropriations)• Caps Federal Section 5309 Small Starts funds
38
Project Construction Grant Agreement
• To receive a PCGA a project must:– Be Authorized in Law– Complete the Planning, Project Development, and NEPA
Processes– Meet Project Readiness Requirements (technical capacity, firm
and final cost estimate and funding)– Receive a “Medium” or higher overall rating– Receive a “Medium” or higher cost effectiveness rating– Meet all other Federal requirements
• Execution of the PCGA will be subject to a 60 day congressional review
39
Before/After Study
• New requirement introduced in final rule• Plan for data collection and analysis developed
during FD/PD • FTA approved plan required prior to FFGA/PCGA• Data collection and analysis costs must be
included in project cost estimate• Activities are eligible for federal funding
40
Before/After Study
• Analyze before-predicted-after data on:– Project scope– Service levels – Capital costs– Operating and maintenance costs– Ridership patterns
41
Before/After Study
• Data collected at three key milestones:- Predictions developed at conclusion of AA, PE/PD and any changes made during Final Design
- Prior Conditions immediately before service impacts caused by construction or opening
- After Conditions collected two years after project opens for revenue service
42
Actual Capital Cost vs. Inflation-Adjusted AA Estimate for Projects Completed 2003-2007
43
Actual Ridership versus AA Forecast for Projects Completed 2003-2007
Average = 74.5%
50th Percentile = 63.8%
New Starts Evaluation and Funding
45
Documents Related to SAFETEA-LU Requirements
• FTA must publish policy guidance for the New/Small Starts review and evaluation process and criteria each time significant changes are made, and not less than every two years– Guidance issued in Spring of 2006 and 2007, and planned for
2008
• FTA must prepare new regulation for New and Small Starts– NPRM issued August 3, 2007– Current appropriation bill prohibits issuance of final rule
46
New Starts Evaluation and Oversight
• Among most rigorous in government • Increasingly credible and important to Congress
and local communities
• Program Management Oversight recommended by GAO and OIG
47
FTA Ratings: New Starts
Summary Rating
Project Justification Rating
Financial Rating
Non-Section5309 Share
Capital Finances
Operating Finances
Other Factors
Low Income Households
User Benefits
Mobility Improvements
Environmental Benefits
Operating Efficiencies
Cost Effectiveness
Land Use
Minimum Project Development Requirements:
Employment
Capital Cost
O&MCost
User Benefits
Metropolitan Planning and Programming Requirements
Project Management Technical Capability
Other Considerations
NEPA Approvals
48
FTA Ratings: New Starts
• Existing New Starts Criteria– Project Justification
- Land-use (transit friendliness of the setting)- Cost-effectiveness (costs in scale with benefits)- Other factors, including economic development, congestion
and pricing strategies, and make-the-case
– Local Financial Commitment
49
Cost Effectiveness
• Dollars per hour of “user benefits” =
• Benefits and costs computed in relation to a “Baseline Alternative”
annualized capital cost + annual O&M cost
user benefits
Cost Effectiveness
Capital Cost
O&MCost
User Benefits
50
Cost Effectiveness
• Used instead of cost/benefit due to the difficulties in monetizing all transit benefits
• Effectiveness measure represents either most of the benefits of projects or is highly correlated to other benefits
• Allows a meaningful comparison of projects nationally of different modes with significant differences in costs and benefits
51
Cost Effectiveness
• Potential sources of transportation benefits – Highway users: benefits from less congestion due to
travelers changing from driving to riding on the project– Current transit users: benefits from faster travel times
using project compared to their previous transit mode– New transit users: benefits from faster travel times
using project
52
Cost Effectiveness
• Current measurement of transportation benefits– Highway users: not included because of serious
travel model difficulties in quantifying degree of congestion relief
– Transit users: benefits from faster travel times for New Starts project for all travelers in the region
- In-vehicle time
- Walk and wait time
- Number of transfers
- Capacity constraints
- Reliability, comfort, security, branding
53
FTA values for Non-Travel Time Benefits
Maximum benefit“Other” attribute Guideway only Guideway + local
Guideway-like characteristics 8.0 3.0- reliability of vehicle arrival 4.0 2.0- branding/visibility/learnability 2.0 1.0- schedule-free service 2.0 0.0
Span of good service 3.0 0.0
Passenger amenities 4.0 3.0- stations/stops 3.0 2.0- dynamic schedule information 1.0 1.0
TOTAL constant 15.0 6.0
IVT coefficient 0.75*Civt 0.75*Civt
54
User Benefits: Example #1
TSM
BLD
Local bus
Train
On
On Off
OffWait time = 5 min; run time = 20 min
Wait time = 5 min; run time = 15 min
100 transit trips
110 transit trips
User benefits = 100 trips x 5 minutes/trip (existing trips)
+ 10 trips x 5/2 minutes/trip (new trips)
User benefits = 500 minutes + 25 minutes = 525 minutes
55
User Benefits: Example #2
TSM
BLD
Local bus
Train
On
On Off
OffWait time = 5 min; transfer time = 4 min; total run time = 40 min
Wait time = 3 min; run time = 30 min
100 transit trips
120 transit trips
User benefits = 100 trips x (2.0 x 6 + 10) minutes/trip (existing trips)
+ 20 trips x (2.0 x 6 + 10)/2 minutes/trip (new trips)
User benefits = 2,200 minutes + 440 minutes = 2,640 minutes
Train
56
Cost-Effectiveness
• Current breakpoints* for ratings:– Low >$30 per hour– Medium-low $24 - $29.99 per hour– Medium $15.50 - $23.99 per hour– Medium-high $12 - $15.49 per hour– High < $11.99 per hour
* Adjusted annually using the GDP deflator
57
Determination of Cost Effectiveness Breakpoints
Based on the Value of Time• 50% of median income per DOT policy ($10.54
when breakpoints established) plus• 20% assumed for highway user benefits ($2.11)
plus• Indirect benefits such as economic development,
safety improvements, pollutant reductions ($12.65)
• Result ($25.30 rounded to $25.00)
58
Breakpoints and Funding
• Projects with cost effectiveness over $25.00 should not be funded
• FTA established the breakpoint for “Low” rating at $25.00 “Low” rated projects cannot be funded
• April 2005 - FTA announced more stringent standards – Projects with “Medium-Low” rating would not be
recommended for funding
59
What’s a Baseline Alternative?
• Low capital cost relative to fixed guideway• Includes service frequencies, coverage, p&r lots
comparable to the build alternatives• “Best you can do to improve transit without
building a new guideway”
60
Why Use a Baseline Alternative?
• Illuminates project’s benefits and costs– Allows for identification of the additional project
benefits due to significantly larger additional capital costs
– Addresses concerns of critics that lower cost options are just as effective
• Ensures consistent evaluations nationally– Enables FTA to fairly assess project benefits in areas
with good current transit service and areas with poor service
61
Land Use
Based on strength of:– Transit supportive
existing land use– Transit supportive
plans and policies– Demonstrated local
performance of transit supportive policies
Land Use
62
Mobility Improvements
• User benefits per project passenger mile for all users and for transit dependents
• Number of all users of project and transit dependent riders
• Share of user benefits for transit dependents compared to the share of transit dependents in the Region
63
Environmental Benefits
EPA air quality designation for region
64
Other Factors
Considerations not captured in other criteria:• Project part of a pricing strategy in congestion
management plan• “Case” for the project • Economic development• Other
Other factors
65
Case for the Project
• Make-the-Case document– Guide to project benefits and “justification”
- For FTA staff- For FTA briefing papers, talking points- For the Annual Report on New Starts
– Element of project “justification” rating
66
Case for the Project - Outline
• No more than “five pages”– Project identification– Setting– Purpose– Current conditions in the corridor– Anticipated conditions in 2030– The case for the proposed project– Risk– Summary
67
Case for the Project - Some Not-Useful Elements
• Topics relevant elsewhere (not here)– History of project development– Detailed project description– Financial feasibility– Public support; other support– “Importance”– Pictures
68
Case - Thoughts on Good Practice
• Focus– All discussion sections should help explain the
benefits of the project– A strategy
1. Figure out the principal benefits (markets: geography, trip purposes, etc.) that make the case
2. Focus the introductory sections (setting, current and future conditions) on those markets
69
Case - Thoughts on Good Practice
• Quantification– Forecasts have numbers for ≈ everything– Use them to avoid hand-waving.
• Clarity– “To write well is to think clearly. That’s why it’s
so hard.” – David McCollough, 2003
– Assign someone who can do both.
70
Case - Thoughts on Good Practice
• Resources– Basic summaries often not enough– Subtask: extract information from forecasts– Preservation of resources for this work
• FTA assistance• Ethics
– Reliable numbers for decision-making– Bringing project benefits to the discussion
71
Local Financial Commitment
Based on:– Current capital and
operating financing condition
– Commitment of capital and operating funds
– Cost estimates/planning assumptions/capacity
Local Financial Commitment Rating
Non-Section5309 Share
(20%)
Capital Finances
(50%)
Operating Finances
(30%)
72
Financial Ratings In Project Development
• PE Approval – Reasonable financial plan; Funding sources identified; Good non-federal funding history
• FD Approval – At least 50 percent of non-5309 New Starts funding committed; Firm cost estimates; Ability to address funding shortfalls
• FFGA – 100% non-New Starts funding committed; Funding shortfalls covered
73
FTA Ratings: Small Starts
Summary Rating
Project Justification Rating
Financial Rating
Non-Section5309 Share
Capital Finances
Operating Finances
Other Factors
Cost Effectiveness
Land Use
Minimum Project Development Requirements:
Capital Cost
O&MCost
User Benefits
Metropolitan Planning and Programming Requirements
Project Management Technical Capability
Other Considerations
NEPA Approvals
74
FTA Ratings: Small Starts
• Existing New Starts framework• Simplifications
– Fewer criteria– Simpler evaluation measures for land use criterion– Opening year forecasts only– Simpler travel forecasting procedures possible– Simpler financial documentation possible
75
FTA Ratings: Small Starts (continued)
• Simpler financial documentation possible– Rating of “medium” for local financial commitment if:
- Reasonable plan to secure local share (all non-New Starts funding committed for PCGA)
- Project O&M under 5 percent of agency operating budget- Agency in solid financial condition
– Projects that cannot meet these conditions submit a financial plan- According to FTA guidance- Covering period up to and including opening year- Evaluated based on criteria used for New Starts
76
FTA Ratings: Very Small Starts
Summary Rating
Project Justification Rating
Financial Rating
Non-Section5309 Share
Capital Finances
Operating Finances
Other Factors
Cost Effectiveness
Land Use
Minimum Project Development Requirements:
Capital Cost
Benefiting Riders
Metropolitan Planning and Programming Requirements
Project Management Technical Capability
Other Considerations
NEPA Approvals
77
FTA Ratings: Very Small Starts
• Existing New Starts framework• Simplifications
– Fewer criteria– “Warrants” approach for project justification
- Benefiting riders > 3,000/day- Capital cost (excl. vehicles) < $3M/mi.- Total capital cost < $50M
– Simpler financial documentation possible (as with Small Starts)
Demonstrate consistency with characteristics of “justified” projects
78
Summary Ratings
• Rating categories:– High– Medium-high– Medium– Medium-low– Low
• Decision Rule:– Must have at least “Medium” on both
justification and finance to receive “Medium” overall
Summary Rating
Project Justification Rating (50%)
Local Financial Commitment Rating
(50%)
79
Project Ratings and Decisionmaking
• Ratings guide FTA approvals of PE/PD, Final Design, and FFGA/PCGAs
• “Medium” or better overall rating required to advance
• Once in PE/PD, rating reported each year in Annual Report on Funding Recommendations
Planned Outreach Activities
81
Workshops and Training Courses
• TBD, Alternative Analysis Courses• March, 2009, New/Small Starts Workshop at
APTA Legislative Conf • March, 2009, Travel Forecasting Workshops for
New/Small Starts • Spring 2009, New/Small Starts Roundtables (by
invitation)• June 2009, New/Small Starts Workshop at APTA
Rail Conf