Public Transportation:

Improvements Are Needed to More Fully Assess Predicted Impacts of New Starts Projects

GAO-08-844: Published: Jul 25, 2008. Publicly Released: Jul 25, 2008.

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Through the New Starts program, the Federal Transit Administration (FTA) evaluates and recommends new fixed guideway transit projects for funding using the evaluation criteria identified in law. In August 2007, FTA issued a Notice of Proposed Rulemaking (NPRM), in part, to incorporate certain provisions within the Safe, Accountable, Flexible, Efficient, Transportation Equity Act: A Legacy for Users (SAFETEA-LU) into the evaluation process. SAFETEA-LU requires GAO to annually review FTA's New Starts process. This report discusses (1) the information captured by New Starts project justification criteria, (2) challenges FTA faces as it works to improve the New Starts program, and (3) options for evaluating New Starts projects. To address these objectives, GAO reviewed statutes, FTA guidance and regulations governing the New Starts program, and interviewed experts, project sponsors, and Department of Transportation (DOT) officials.

FTA primarily uses cost-effectiveness and land use criteria to evaluate New Starts projects, but concerns have been raised about the extent to which the measures for these criteria capture total project benefits. FTA's current transportation system user benefits measure, which assesses a project's cost effectiveness, focuses on how proposed projects will improve mobility by reducing the real and perceived cost of travel. FTA told GAO that such mobility improvements are a critical goal of all transit projects. While the literature and most experts that GAO consulted with generally agree with this assertion, they also raised concerns that certain benefits are not captured. As a result, FTA may be underestimating transit projects' total benefits, but it is unclear the extent to which this impacts FTA's evaluation and rating process. FTA officials acknowledged many of these limitations but noted that resolving these issues would be difficult without a substantial investment of resources by all levels of government to improve and update local travel models. FTA faces several systemic challenges to improving the New Starts program, including addressing multiple program goals, limitations in local travel models, the need to maintain the rigor while minimizing the complexity of the evaluation process, and developing clear and consistent guidance for incorporating qualitative information. The evaluation criteria identified in the law reflect multiple goals for the program, which has led to varying expectations between FTA and project sponsors about what types of projects should be funded. Also, models that generate local travel demand forecasts are limited and may not provide all of the information needed to properly evaluate transit projects. FTA has taken steps to mitigate the modeling limitations, such as incorporating proxy measures to account for certain project impacts and developing a request for proposals to improve local travel models so that they can better predict changes in highway user benefits. However, according to FTA officials, the request for proposals is only a first step in improving local travel models, and additional resources are needed. Experts and project sponsors GAO interviewed discussed different options for evaluating proposed transit projects but identified significant limitations of each option. One option is to revise the current New Starts evaluation process as proposed by FTA in the August 2007 NPRM. While some experts GAO spoke to appreciated the rigor of the current evaluation process, others noted that the NPRM may still underestimate total project benefits. For example, FTA's measure of mobility improvements does not account for benefits accruing to highway users, and its measures of environmental benefits may not properly distinguish among projects. Experts also discussed other options for evaluating proposed transit projects, including benefit-cost analysis. Unlike FTA's current evaluation process, benefit-cost analysis would attempt to monetize all benefits and costs, which experts told GAO would be a more comprehensive approach to evaluating projects. FTA is currently prohibited by statute from considering the dollar value of mobility improvements in evaluating projects.

Status Legend:

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  • Review Pending-GAO has not yet assessed implementation status.
  • Open-Actions to satisfy the intent of the recommendation have not been taken or are being planned, or actions that partially satisfy the intent of the recommendation have been taken.
  • Closed-implemented-Actions that satisfy the intent of the recommendation have been taken.
  • Closed-not implemented-While the intent of the recommendation has not been satisfied, time or circumstances have rendered the recommendation invalid.
    • Review Pending
    • Open
    • Closed - implemented
    • Closed - not implemented

    Recommendations for Executive Action

    Recommendation: To improve the New Starts evaluation process and the measures of project benefits, which could change the relative ranking of projects, the Secretary of Transportation should seek additional resources to improve local travel models in the next authorizing legislation.

    Agency Affected: Department of Transportation

    Status: Closed - Implemented

    Comments: In 2008, we reported that local travel models should be improved to develop and employ better measures of project impacts . We indicate that the benefit of improved local travel models would extend beyond transit, as the data from these models are used to inform regional transportation planning for other modes of transportation, as well. We recommended that the Secretary of Transportation (DOT) seek resources to improve local travel models . DOT's Fiscal Year 2012 Budget highlights indicates that, as part of a 6-year reauthorization proposal , states and localities will be encouraged to improve their planning models in order to have better data to make sound investment decisions with federal funding. The budget request indicates that the Administration's proposal will bolster state and metropolitan planning; award funds to high performing communities; and empower the most capable communities and planning organizations to determine which projects deserve funding. As a result, DOT is encouraging improvements to models along with its request for increased funding for transit.

    Recommendation: To improve the New Starts evaluation process and the measures of project benefits, which could change the relative ranking of projects, the Secretary of Transportation should seek a legislative change to allow FTA to consider the dollar value of mobility improvements in evaluating projects, developing regulations, or carrying out any other duties.

    Agency Affected: Department of Transportation

    Status: Open

    Comments: No change. The agency concurs, in part, but is awaiting Congress' decisions during the surface transportation reauthorization.

    Recommendation: To improve the New Starts evaluation process and the measures of project benefits, which could change the relative ranking of projects, the Secretary of Transportation should direct the Administrator of FTA to establish a timeline for issuing, awarding, and implementing the result of its request for proposals on short- and long-term approaches to measuring highway user benefits from transit improvements.

    Agency Affected: Department of Transportation

    Status: Open

    Comments: No change. FTA expects to award the contract in early 2009 and complete the implementation of new approaches to measuring highway benefits by spring 2010.

    Recommendation: To improve the New Starts evaluation process and the measures of project benefits, which could change the relative ranking of projects, the Secretary of Transportation should direct the Administrator of FTA to establish a timeline for initiating and completing its longer-term effort to develop more robust measures of transit projects' environmental benefits that are practically useful in distinguishing among proposed projects, including consultation with the transit community.

    Agency Affected: Department of Transportation

    Status: Closed - Implemented

    Comments: In 2008, we reported that although the Federal Transit Administration (FTA) committed to work with environmental experts to improve how it measures environmental benefits of proposed New Start transit projects, FTA had not begun this effort. We recommended that FTA establish a timeline for its effort to develop more robust measures of transit projects' environmental benefits that are practically useful in distinguishing among proposed projects. Rather than establish a timeframe, FTA moved to improve how it measures environmental benefits. As documented in its January 2012 Notice of Proposed Rulemaking, FTA proposed a new approach for better measuring environmental benefits of proposed New Start projects. The January 2012 Notice of Proposed Rulemaking considered public comments and proposed measuring environmental benefits of a proposed project's on several factors including changes in emissions, greenhouse gases, safety, energy use and public health. These factors would be monetized and compared to the annualized capital and operating cost of the proposed project to measure the benefits. As a result, FTA is improving its measurement and evaluation of environmental benefits of New Starts transit projects; and thus will improve the projects FTA recommends for federal funding.

    Recommendation: To improve the New Starts evaluation process and the measures of project benefits, which could change the relative ranking of projects, the Secretary of Transportation should direct the Administrators of FTA and FHWA to collaborate in efforts to improve the consistency and reliability of local travel models, including the aforementioned request for proposals on approaches to measuring highway user benefits.

    Agency Affected: Department of Transportation

    Status: Open

    Comments: GAO received the 60-day letter in January 2009. The agency indicated that it plans to take steps to address this recommendation in spring 2009. GAO will monitor its progress.

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