[sustran] Fwd: Rating and Evaluating "New Starts"

[Jerry Schneider]

Growing interest in opening up the "alternatives analysis" process
conducted by the Federal Transit Admistration in the US DOT
-------------------------------------

>Dear Colleague,
>Because of your interest and involvement in public transit issues, I thought
>you might be interested in this pre-publication text of an upcoming
>Innovation Brief on FTA's New Starts program.
>Sincerely,
>Ken Orski, Editor, Innovation Briefs
>
>
>Rating and Evaluating "New Starts"
>
>"Transit use is important in a number of our nation's major urban centers.
>However, many cities have built or are building systems that are overpriced
>or underutilized..." So stated Chairman Ernest J. Istook in his opening
>statement at the April 28 hearing of the House Transportation Appropriations
>Subcommittee on "Rating and Evaluating New Fixed Guideway Systems." Rep.
>Istook went on to say, ""We need to better emphasize cost-effectiveness and
>congestion relief as measures of a candidate project's worthiness to receive
>federal funds. Currently FTA is tracking over 150 projects in planning
>studies and preliminary stages for new projects or system expansions. These
>projects could seek over $60 billion in federal New Starts funding over the
>next several years...We all know that sixty billion dollars simply will not
>be available, so we had better get started in winnowing the field of
>candidates..." The chairman's opening statement summarized succinctly the
>challenge facing the Federal Transit Administration in the years ahead: How
>to become more adept at weeding out projects that do not relieve the most
>congestion, move the most people and are the most cost-effective.
>
>U.S. DOT Inspector General Kenneth Meade stated concisely the dilemma facing
>the congressional appropriators:
>
>"...there are 26 projects with existing full funding grant agreements and
>another 38 projects in preliminary engineering, final design or that have
>been proposed for funding, which collectively are seeking $24.3 billion in
>federal funding. However, the funds available for New Starts projects over
>the next six years can support only a fraction of these projects.
>Specifically, the House transit reauthorization designated a total of $9.5
>billion for New Starts for Fiscal Years 2004 through 2009. Of the $9.5
>billion, the house bill provides $3.1 billion for the 26 transit projects
>with existing full funding grant agreements. This leaves $6.4 billion to
>fund other projects over the reauthorization period. Of this amount,
>$4.0billion is proposed for the six projects FTA recommended for multi-year
>grant agreements... If these six projects are approved, only $2.4 billion
>would be left to fund the... 32 projects remaining in the pipeline."
>
>What's to be done? While Committee members offered no explicit
>recommendations (they may do so later, in a Committee report), the tenor of
>their questioning left no doubt as to their thinking.
>
>1. Assert more control over the alternatives analysis process. The
>alternatives analysis is the essential first step in a lengthy process that
>ultimately may lead to an award of a Full Funding Grant Agreement (FFGA) and
>construction of a rail system. The analysis evaluates corridor-level
>transportation options and results in the selection of a "locally preferred
>alternative." Local agencies have broad latitude in conducting this analysis
>and in selecting evaluation criteria.
>
>FTA does not approve the selection of the locally preferred alternative. Nor
>does it evaluate whether alternatives other than rail (such as Bus Rapid
>Transit) might have been more cost-effective or generated greater benefits.
>In deciding whether to advance a locally selected alternative into
>preliminary engineering, the agency relies on information developed by
>project applicant- information which, invariably, supports the local choice.
>As the U.S. DOT Inspector General testified, "once a project emerges as the
>locally preferred alternative, it is difficult to make material changes,
>such as selecting an entirely different mode, since expectations have been
>set, political support for the project has been established, and sometimes,
>even funding put in place."
>
>In its reauthorization bill, the House authorized 143 new alternatives
>analysis studies. Based on past experience, a large number of these analyses
>will result in the selection of a light rail system as the preferred
>alternative. To reduce the number of rail projects entering the New Starts
>funding pipeline, FTA will need to exercise more oversight over the
>alternatives selection process. FTA took a step in this direction when it
>recently issued supplementary guidance specifying the basic information that
>local study sponsors should submit to FTA at the outset of their
>alternatives analysis study (Additional Guidance on Local Initiation of
>Alternatives Analysis Planning Studies, April 2004). But this may not be
>enough. Ultimately, as the Inspector General suggested, Congress may have to
>step in and give FTA explicit authority to approve selection of the locally
>preferred alternative. Without the authority to weed out marginal rail
>proposals at the very outset of the process, FTA will be faced with ever
>growing demands on the limited New Starts resources.
>
>2. Give more weight to cost-effectiveness in the rating process. "In
>evaluating projects, the direct transportation benefits need to be the most
>significant measurements," Chairman Istook noted in his opening statement.
>"Each new start project should be required to show that its locally
>preferred alternative will attract and move more riders, at lower cost, than
>other alternatives." This has not always been the case in recent New Starts
>evaluations. Rep. Istook pointedly noted that six out of the seven candidate
>projects recommended for funding in FY 2005 were rated "Low-medium" for
>cost-effectiveness, yet they all received an overall Project Justification
>rating of "Medium" ("Low-medium" represents the next to the lowest rating on
>a five-point scale of "High," "Medium high," "Medium," Low-medium," and
>"Low." Projects must receive at least a "Medium" rating to be recommended
>for construction funding). As the Inspector General explained, these
>projects received a passing grade despite ranking low in cost-effectiveness
>because FTA assigns equal weight to land use and cost-effectiveness
>criteria. Through the averaging of scores, a high land use rating can
>effectively override a low cost-effectiveness rating to produce an
>acceptable overall rating and hence a recommendation for funding.
>
>3. Too much prominence is being given to the subjective criterion of land
>use. FTA has made land use a separate measure of evaluation to acknowledge
>the developmental influence of rail investment which, it believes, can be an
>important indicator of future economic benefits. All seven candidate
>projects recommended for funding received "Medium," "Medium-High" or "High"
>rating for land use, although evidence of land use impact of light rail
>transit remains highly debatable. Indeed, development around light rail
>stations has been insignificant in most New Starts cities. What is more, FTA
>awards high ratings for land use both if the station sites already are
>developed (and thus are likely to generate ridership on the new rail system)
>and if they are surrounded by vacant land (and thus offer a potential for
>future development). Land use effects, several committee members suggested,
>receive too much emphasis. The Inspector General concurred: "If the goal is
>to give greater emphasis to the direct transportation benefits...then the
>balance between these benefits and land use may need to be reconsidered."
>
>4. Pay more attention to congestion relief in estimating transportation user
>benefits and develop more accurate methods of estimating highway travel time
>savings as a proxy for congestion relief . Testimony by Administrator Dorn
>and Inspector General Kenneth Mead indicated that FTA has not been able to
>reliably estimate congestion reduction benefits of rail projects from the
>data provided by local sponsors. Its evaluation captures only time-savings
>realized by existing and new transit riders, but not travel time savings
>experienced by motorists. Are there any such savings? Many analysts believe
>that light rail investment has little or no effect on traffic congestion.
>According to Texas Transportation Institute data, none of the urban areas
>that have built light rail systems in recent years have been able to
>demonstrate reduced traffic intensity.
>
>5. Develop better methods of estimating potential ridership on rail systems.
>All parties at the hearing agreed that ridership is the single most critical
>element supporting project justification and is at the basis of determining
>all project-related benefits. In the words of the Inspector General,
>"Reliable ridership estimates are paramount to achieving the intended
>improvements - namely the identification of projects with the greatest
>tangible benefits." Unfortunately, current ridership forecasting techniques
>leave much to be desired. An FTA study of transit systems coming into
>service between 1990 and 2000 compared actual ridership with ridership
>forecasts in five light rail systems that have been in revenue service for
>at least four years. "We found that these projects fell materially short of
>delivering promised ridership," testified the Inspector General. The
>ridership levels actually achieved ranged from 33 percent (Houston SW
>Transitway) to 89 percent (Portland Westside LRT) of the predicted values.
>
>In the last issue of Innovation Briefs we suggested that the proposed
>congressional reauthorization, with 38 authorized projects in the funding
>pipeline and 143 authorized alternatives analysis studies has placed
>congressional appropriators in an untenable position, since only a small
>fraction of the authorized projects can be expected to receive funding. We
>expressed the hope that Chairman Istook's transportation appropriations
>subcommittee might take a careful look at the New Starts program and
>instruct the Federal Transit Administration to take a more disciplined
>approach to managing the limited New Starts dollars. We hope that the
>Committee's report will spell out in explicit terms the reforms it expects
>the agency to make in its rating and evaluation process, and recommend
>appropriate congressional action to give FTA the necessary authority to
>prevent marginally effective rail proposals from entering the New Starts
>pipeline.
>
>C. Kenneth Orski
>korski at erols.com
>tel: 301.299.1996
>fax: 301.299.4425
>http://www.innobriefs.com
>
>
>
>
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- Jerry Schneider -
     Innovative Transportation Technologies
       http://faculty.washington.edu/jbs/itrans