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New Starts/Small Starts Shift to Focus on Livability

Posted on February 9, 2010 by Alex Roman, Managing Editor

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[IMAGE]LaHood2-1.jpg[/IMAGE]Whether it be spending money to save jobs or build high-speed rail projects, in the first year of President Barack Obama's administration, it has become clear that public transportation plays a huge role in his vision for America's future. With this vision have come several changes to the New Starts/Small Starts programs that are seen as favorable for public transportation. These changes aim to simplify the process and "grease the wheels," so to speak, to keep public transportation projects moving along at a quicker pace.

One example of how the changes to the New Starts/Small Starts program are impacting the public transportation industry comes from Federal Transit Administrator Peter Rogoff: "My staff has told me that we at the FTA have responded to more inquiries and provided more information that comes directly from the White House in President Obama's first nine months in office than we have provided in the last eight years," he told the crowd at the American Public Transportation Association's Annual conference in Orlando, Fla., last September. "For us at the FTA, this White House is 'high maintenance' - and we expect it to stay that way."

Project selection shift

To this point, there have been a couple major changes that have had an impact in how transit projects will be selected for New Starts/Small Starts. These changes, coincidentally, also can be looked at when trying to understand what this administration's focus for transportation projects may be.

One major shift was in project justification criteria weights - cost effectiveness, mobility improvements, operating efficiencies, environmental benefits, land use and economic development - being switched so that they fell in line with the SAFETEA-LU (Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users) technical corrections act, which directed the FTA to make those changes.

"What the administration did was essentially reduce the weight given to cost effectiveness to 20 percent, and then assigned economic development and land use each with 20 percent, so that the combined weight of those two items is now 40 percent," explains Jeff Boothe, principal at Holland & Knight LLP.

The change, Boothe explains, may substantially impact what sort of projects will be selected in the New Starts/Small Starts program going forward, with more of a focus on sustainable, economically beneficial projects.

Last fall the administration made several other policy changes as well.

"The New Starts criteria have a category called 'other factors' and the Bush administration had asked project sponsors to speak to congestion pricing, for example, and innovative procurement strategies," says Don Emerson, principal consultant for Parsons Brinckerhoff (PB). "Those factors have been removed from the FTA list. Project sponsors can still address them in their submissions, but this administration is interested in livability."

To further solidify the administration's focus on land use and sustainability, in remarks made at the Transportation Research Board annual meeting in January, U.S. Transportation Secretary Ray LaHood proposed that new funding guidelines for major transit projects be based on livability issues, such as economic development opportunities and environmental benefits, in addition to cost and time saved - at the time, the primary criteria.

As part of this initiative, Sec. LaHood said the FTA would immediately rescind budget restrictions issued by the Bush administration in March of 2005 that favored those projects that offered the fastest commute trips at the lowest cost.

"It rolls back a policy that requires a medium rating for cost effectiveness to advance through each stage of the project development process, and it rolls back the requirement for a medium rating to be recommended for funding in the president's budget," says Boothe.

Boothe adds that it is important to clarify that the change does not get rid of cost effectiveness as of this present time, as it will still be measured by looking at user benefits or travel time savings for the users of a system, a point he says has been misunderstood, since the announcement.

The misrepresentation of the facts, which Boothe is quick to clarify, recently caused Administrator Rogoff to write an open letter to Minneapolis' Pioneer Press to explain the administration's position, when he believed an editorial that ran in the paper inferred that the administration is no longer concerned with the cost effectiveness of projects.

"Under the Bush policy, the FTA literally collected data from project sponsors on benefits, such as economic development, improved land use, environmental impacts and congestion relief, and then completely ignored that data in making funding decisions," Rogoff wrote. "Contrary to the inference of your editorial, however, the cost effectiveness of projects will continue to be an important evaluation factor for the FTA. It will just no longer be the only factor."

The change will apply to how the FTA evaluates major transit projects going forward. In making funding decisions, the FTA will now evaluate the environmental, community and economic development benefits provided by transit projects, as well as the congestion relief benefits from such projects.

FTA will soon initiate a separate rulemaking process, inviting public comment on ways to appropriately measure all the benefits that result from these investments.

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