Mass Transit: 'Mobility Improvements' Is One of Many Factors Used to Evaluate Mass Transit Projects

Published by the Government Accountability Office on 1999-10-15.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

United   States General     Accounting    Office                                            Resources,    Community,      and
Washington,      DC 20548                                                              Economic    Development      Division


October 15, 1999

The Honorable Phil Grarnm
The Honorable Paul S. &banes
Ranking Minority Member
Committee on Banking, Housing,
  and Urban &%irs
United States Senate

The Honorable Bud Shuster
The Honorable James Oberstar
Ranking Democratic Member
Committee on Transportation and Jnfr&ructure
House of Representatives

Subject:           Mass Transit: “Mobil&v Improvements”         Is One of Many Factors Used to
                   Evaluate Mass Transit Proiects

Since the early 197Os,the federal government has contributed large sums to the nation’s capital
investment in urban mass transit. In the 5 years prior to April 1999, for example, the Department of
Transportation’s (DOT) Federal Transit AdmirWration’s       (FI’A) %ew starts” program-which funds
major new rail, bus, and trolley transit projects using separate and exclusive rights of way-has provided
state and local transit agencies with about $3.8 billion to help design and construct such projects
nationwide.      The Transportation      Equity Act for the 21” Century   (TEA-21),’     enacted    in June 1998,
authorizes $8.2 billion for new starts transit projects through l&al year 2003. As required by that act,
we reported in April 1999 on FIX’s processes and procedures for evaluating, rating, and recommending
new starts transit projects for federal funding. * The act requires FI’A to issue regulations describing
how it considers new starts project criteria for overall project ratings. TEA-21 also required us to
review “mobility improvements”-one        of the factors considered in Fl’A’s evaluation of “new starts”
projects. FI’A measures mobility improvements in terms of the amount of time potential projects will

 ‘P.L. 105178.

 'Mass Transit: FTA’s Proaess in DeveloDing and ImDlementim        a New Starts Evaluation        Process (GAO/WED-99-
 113, Apr. 26, 1999).

                                                                              GAOIRCED-00-6R          Mass Transit Projects
save q*stem users and other commuters and the number of low-income households potential projects
will serve. As agreed with your offices, this report describes how FTA currently considers mobility
improvements as it evaluates proposed new starts projects. This report also discusses (1) how a
proposed project’s rating for mobility improvements affects its likelihood for selection and (2) FTA’s
proposed changes in how it will evaluate mobility improvements.

How PTA             Considers            Mobil&              Imurovements              When           Evaluating           ProDosed         New Starts           Proiec-

TEA-21    requires that, before FTA may approve a grant or loan for a proposed new starts transit project,
it must evaluate the project in a variety of ways, including its operating and capital finance plans and
the mobility improvements, environmental benefits, and projected cost-effectiveness and operating
efficiencies associated with the project. As shown in figure 1, FTA organizes these various criteria into
two separate categories: local financial commitment and project justifxation. Mobility improvements
is one of several project justi5cation criteria
Figure 1:    FTA’s New Starts              Evaluation         and Rating       Process

The   local share    is the percentage      of a project’s     capital   cost to be funded     from    sources    other    than new starts funding.

“According     to FTA, this optional criterion gives grantees            the opportunity     to provide    additional     information   about a project   that may contribute
in determintng     the project’s overall success.

Source:   FTA

To help develop a proposed project’s overaH rating, FIX, based on documentation submitted by project
sponsors, assigns a descriptive rating of high, medium-high, medium, low-medium, or low to each
criterion including mobility improvements. Once the individual criterion ratings are completed, FTA
combines them to develop summary project justification     and local financial commitment ratings. FX’A
then combines the project justification and financial commitment summary ratings to assign an overall
project rating of highly recommended, recommended, or not recommended. To receive the highly
recommended rating, a project must have summary project justification and local financial commitment
ratings of at least medium-high. To receive a rating of recommended, the project must have summary
ratings of at least medium. A project is rated as not recommended when either SummaIy rating is less
than medium3

?or a complete description of FIX’s new starts evaluation and recommendation process, see our Apr. 26, 1999,

2                                                                                                                         GAOLRCED-00-6R           Mass Transit       Projects
FTA evaluates the proposed improvements for mobility by reviewing two measures-travel time savings
and the number of low-income households served.J The first measure reflects the total travel time
savmgs anticipated from the new starts investment compared to other alternatives. This includes the
travel time savings for new and existUg transit riders as well as people using competitive modes of
travel such as personal automobiles. Because TEA-21 directs FI’A to “not consider the dollar value of
mobility improvements” in assessing new starts projects, FTA evaluates the sum total of the estimated
hours saved (or increased) by commuters and others affected by each proposed project. In order to
compare projects, FI’A normalizes the measure by each project’s annual capital cost, which results in a
measure of hours saved per dollar of capital cost.

The second mobility improvements measure reflects the absolute number of low-income households-
defined as households below the poverty level-located within a half-mile of a proposed project’s
boarding points, or stations. As it does with the time savings measure, FI’A normalizes this measure by
each project’s annual capital cost, which results in a composite measure of persons served per dollar of
capital cost.

FI’A then ranks the projects according to both of these mobility improvements measures and assigns,
for each measure, a high, medium-high, medium, low-medium, or low rating based on the projects’
relative rankings. These ratings are then combined (with greater emphasis on travel time savings) to
assrgn an overall mobility improvements rating.

Hiti   Mobilitv   ImDrovements     R&ina    Does Not Guarantee        Proiect   ADDrOVd

Because FI’A considers numerous criteria in determinin g a project’s overall rating, a rating in any one
criterion cannot be used to absolutely predict FTA’s fmal dete rmination with respect to a particular
project. As a result, some projects that are rated high or medium-high for mobility improvements will
not receive a rating of recommended. PTA’s Director for Policy Development told us that some
proposed new starts projects could receive high ratings for improving mobility but not receive a rating
of recommended because their financial commitment packages are not yet completed. He also told us
that he would expect to see a fairly strong correlation between a project that receives an overall rating
of recommended or highly recommended and its individual criterion ratings, because most projects that
receive a rating of recommended or higher are thoughtfully conceived, well-planned, and well-managed
projects and thus receive high scores across all criteria

Of the 19 projects that FI’A rated as recommended or highly recommended in its fiscal year 2000 new
starts report, 15 received a medium or higher rating for mobility improvements. Only four received a
low rating or medium-low rating. Conversely, of the 20 projects that were not recommended, 14 were
rated low or medium-low for mobility improvements.

FTA Is Considerinn       Some Chances to Its Mobilitv        ImDrovements       Rating

According to an Fl’A official, the agency is considering several changes that would better address
mobility improvements for low-income households as part of its regulations on the entire new starts
evaluation process. DOT issued, in April 1999, a notice of proposed rulernaking describing how FTA
considers every new starts project criteria, including mobility improvements, to establish overall

“The measures for each project jusufication criterion were proposed by FTA in 1994 and became final in 1996,
after FI’A circulated its proposed new starts evaluation policy for comments to interested parties, including state
and local govemrnents, transit agencies,metropolitan planning organizations, and consultants. As a result of the
comments received, F’IA adopted the criteria measures currently in use.

3                                                                          GAO/RCED-00-6R     Mass Transit   Projects

project ratings.’ DOT received 41 comments, of which 24 contained either a general or specik
comment directed at how FI’A considers mobility improvements. Some of these comments were
directed speczcally at how the current evaluation process considers the mobility of the low-income
households to be served by the proposed project. Several commenters stated that the number of low-
income households within one-half mile of the system’s boarding points was an inadequate measure of a
proposed project’s improvements to mobility. FTA expects the final regulation to be implemented in
time to be used to prepare its fiscal year 2002 report on new starts funding to be issued in February
2001. For the fiscal year 2001 annual new starts report due in February 2000, FI’A will use the existing

Apencv     Comments

We provided a draft of this report to DOT for review and comment. We then met with J?I’A’s Director
for Policy Development. FTA agreed with the report’s information and provided a minor clarification,
which we incorporated.

ScoDe and Methodoloev

To address the-mobility improvements issues in this report, we reviewed the legislation governing new
starts transit projects, FI’A’s fiscal year 2000 new starts report, its technical guidance on the new starts
criteria, and comments on the notice of proposed rulemaking for the new starts evaluation process. We
also talked with FIX’s Director for Policy Development.

We performed our work from August through October 1999 in accordance with generally accepted
government auditing standards.

We are sending copies of this report to the Honorable Rodney E. Slater, Secretary of Transportation; the
Honorable Gordon Linton, Administrator, Federal Transit Admmistration; the Honorable Jacob Lew,
Director, Office of Management and Budget; and other interested parties. We will make copies
available to others upon request. Key contributors to this report were Jack Bagnulo, Carol Ruchala, and
Ron Stouffer. Please call me at (202) 512-2834 if you have any questions about this report.

Phyllis F. Scheinberg
Associate Director,
 Transportation    Issues

‘64 Fed. Reg. 17062, (Apr. 7, 1999).

4                                                                      GAO/ECED-00-6R   Mass Transit   Projects
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