[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.


Urban circulator funding

In addition to changes made directly to the New Starts/Small Starts selection process, one other change that may impact the way funds are doled out is the administration's announcement in December of the availability of $130 million for urban circulator projects, such as streetcars, to support communities, expand business opportunities and improve quality of life, while also creating jobs.

The money represents the first batch of funding by the Obama administration for its Livability Initiative, a joint venture of the U.S. Department of Transportation (U.S. DOT), U.S. Department of Housing and Urban Development and the Environmental Protection Agency.

A maximum amount of $25 million per project will be made available from approximately $130 million in unallocated discretionary New Starts/Small Starts Program funds. Eligible projects include streetcars and other urban circulator systems. Priority will be given to projects that connect destinations and foster the redevelopment of communities into walkable, mixed use, high-density environments.

The FTA plans to announce grants early in 2010.

"I'd say the urban circulator program lets them fund projects that are exempt from New Starts/Small Starts," says Boothe. "What that tells me then is they are still concerned existing criteria may make it difficult for streetcars to move forward, since they want folks to go through this exempt category of projects."

Boothe adds that it will be interesting, then, to see which projects will be funded through the urban circulator and TIGER (Transportation Investment Generating Economic Recovery) programs, and how the projects funded will eventually impact the competition for New Starts/Small Starts funds.

'Too early to tell'

PB's Emerson says that the changes create new opportunities, and that's exciting. He added that the New Starts/Small Starts program is constantly in flux, with each administration tweaking it to emphasize what is most important to them.

"All the changes can be a challenge for those who want to use the program," he says. "Unless one follows the program day in and day out, the ever-changing laws, rules, policies, technical guidance and precedents can be a bit daunting. We'll have to wait and see what happens with the upcoming rulemaking and reauthorization legislation. It's too early to tell how all this will play out."

Meanwhile, Boothe feels that the changes are a positive step at righting the nation's public transportation outlook.

"It's all to the positive," he says. "We're moving progressively in the direction where, hopefully, we're less focused on putting projects in railroad right-of-way or freeway medians and more focused on putting projects where people live and work."

In addition to that, Boothe says that it is a positive that this administration is looking to make the right investment to shape land use and economic development and is less focused on putting it there because of accrued travel time savings and user benefits.

As a result, more focus will be placed on putting stations where people live to let them access transit, rather than giving more travel time benefits to people driving and parking at transit stations instead of busing, walking or biking to transit, which is what the last administration did, explains Boothe.

"We're now more focused on people walking and biking to transit and less focused on putting park-and-ride lots and multi-storied parking garages at the end of lines to jack up cost-effectiveness numbers," Boothe adds. "Those sorts of changes are subtle, but they do lead you to a different outcome in terms of alignment and technology choices."

Measure the benefits

There are a few things down the road that may help clarify exactly where the Obama administration plans on taking the New Starts/Small Starts program.

In the short term, the FTA plans on releasing a Notice of Proposed Rulemaking that will seek to implement some of 2005's technical corrections to SAFETEA-LU, as well as finding ways to properly measure all the benefits.

"Back in the day, the Bush administration sought to use the regulation to do things like implement Very Small Starts as a matter of regulation, sought to fund toll lanes and congestion pricing as a permanent part of the regulation, and that is why Congress blocked the rule," explains Boothe. "So, this administration is likely to make changes."

Another important thing to watch for possibly this spring is guidance for project sponsors submitting information for the next budget cycle in Fiscal Year 2012, which will again clarify exactly where the feds are moving toward in the New Starts/Small Starts program.

At this point, all signs are pointing toward the continued importance of livable communities, and providing greater choices for transportation users through the integration of transportation, housing and commercial development decisions.

In February, President Obama's $79 billion U.S. DOT budget proposal included $527 million in funding for livable communities by establishing an Office of Livable Communities, creating a program to improve local and state project planning and development capabilities, and funding programs that expand transit access for low-income persons.

"I'm looking forward to future changes that will streamline the process," says Emerson. "With an upcoming rulemaking and reauthorization, it's going to be a busy year for New Starts."