Guidance on New Starts Policies and Procedures and FY 2008 New Starts Reporting

May 22 Federal Register Notice Notice of Availability - May 16 Policy Guidance Notice of Availability - May 16 Policy Guidance Response to Comments on Draft Guidance Response to Comments on Draft Guidance Notice of Availability - New Starts Reporting Instructions and FY 2008 Evaluation Process Notice of Availability - New Starts Reporting Instructions and FY 2008 Evaluation Process Schedule for FY 2008 New Starts Reporting Schedule for FY 2008 New Starts Reporting

SAFETEA-LU Says…… Section 3011(d)(6) requires that FTA publish, for comment and response, Policy Guidance Section 3011(d)(6) requires that FTA publish, for comment and response, Policy Guidance 180 days after enactment of SAFETEA-LU 180 days after enactment of SAFETEA-LU Each time significant changes are made to the process/criteria Each time significant changes are made to the process/criteria At least every two years At least every two years FTA’s Response…….. FTA’s Response…….. January 19, 2005 Proposed Guidance January 19, 2005 Proposed Guidance 60 day (plus additional week) comment period 60 day (plus additional week) comment period 2-day working session w/ APTA Policy and Planning Committee 2-day working session w/ APTA Policy and Planning Committee May 16 Final Guidance May 16 Final Guidance

Changes Proposed in Draft Guidance NEPA/New Starts Interfaces NEPA/New Starts Interfaces NEPA Scoping NEPA Scoping New Starts Information in NEPA Documents New Starts Information in NEPA Documents Acceptable New Starts Rating for Issuance of NEPA Final Doc/Decision Acceptable New Starts Rating for Issuance of NEPA Final Doc/Decision Before and After Study Documentation Before and After Study Documentation Expanded Certification of Methods and Assumptions Expanded Certification of Methods and Assumptions Uncertainty in Costs and Ridership Forecasts Uncertainty in Costs and Ridership Forecasts Project Development Agreements Project Development Agreements FFGA New Starts Level Set at Final Design Approval FFGA New Starts Level Set at Final Design Approval Consideration of Rules for Use of Mode-Specific Constants Consideration of Rules for Use of Mode-Specific Constants

Changes Adopted in Final Guidance NEPA/New Starts Interfaces NEPA/New Starts Interfaces NEPA Scoping NEPA Scoping New Starts Information in NEPA Documents New Starts Information in NEPA Documents Acceptable New Starts Rating for Issuance of NEPA Final Doc/Decision * Acceptable New Starts Rating for Issuance of NEPA Final Doc/Decision * Before and After Study Documentation Before and After Study Documentation Expanded Certification of Methods and Assumptions * Expanded Certification of Methods and Assumptions * Uncertainty in Costs and Ridership Forecasts Uncertainty in Costs and Ridership Forecasts Project Development Agreements Project Development Agreements FFGA New Starts Level Set at Final Design Approval FFGA New Starts Level Set at Final Design Approval Consideration of Rules for Use of Mode-Specific Constants Consideration of Rules for Use of Mode-Specific Constants plus plus Clarification of Cost Effectiveness Breakpoints Clarification of Cost Effectiveness Breakpoints Contractor Performance Report Contractor Performance Report

NEPA Scoping Prior to PE “Require a project to have progressed beyond the NEPA scoping phase before entering preliminary engineering” “Require a project to have progressed beyond the NEPA scoping phase before entering preliminary engineering” Rationale Rationale Confirmation of the LPA / “PE project” Confirmation of the LPA / “PE project” Mitigates against having to do “planning” during PE Mitigates against having to do “planning” during PE Strengthens linkage between NEPA and New Starts Strengthens linkage between NEPA and New Starts

NEPA Scoping Prior to PE Comments - Fairly evenly distributed between supporters and opponents Concern that requiring scoping will prolong project development, increase costs Concern that requiring scoping will prolong project development, increase costs Subjecting the LPA to scoping is confusing to the public Subjecting the LPA to scoping is confusing to the public Policy Guidance Implements this Requirement Policy Guidance Implements this Requirement

New Starts Information in NEPA Documents “Require the EIS to present the New Starts evaluation of the preferred alternative, in addition to NEPA evaluation of the alternatives” “Require the EIS to present the New Starts evaluation of the preferred alternative, in addition to NEPA evaluation of the alternatives” Rationale Rationale Supports CEQ regulations 40 CFR Supports CEQ regulations 40 CFR Provides public and stakeholders with information on the likelihood of receiving New Starts funding Provides public and stakeholders with information on the likelihood of receiving New Starts funding Enhances information available for decisionmaking Enhances information available for decisionmaking

New Starts Information in NEPA Documents Comments – majority opposed Comments – majority opposed May compromise NEPA process and expose FTA to litigation May compromise NEPA process and expose FTA to litigation New Starts information is too confusing to the public New Starts information is too confusing to the public Should be subject to rulemaking Should be subject to rulemaking Policy Guidance Implements this Requirement, with Modification Policy Guidance Implements this Requirement, with Modification

New Starts Information in NEPA Documents Applies to both EAs and EIS’s Applies to both EAs and EIS’s For LPA; FTA strongly encourages for all alternatives in AA/DEIS’s For LPA; FTA strongly encourages for all alternatives in AA/DEIS’s FTA has standard language/format for presenting information and explaining how it is used FTA has standard language/format for presenting information and explaining how it is used Most recent rating would be reported, so long as information in document is consistent w/rating (new rating not always necessary) Most recent rating would be reported, so long as information in document is consistent w/rating (new rating not always necessary) Study/project sponsors should work w/FTA to clarify New Starts criteria and evaluation process for public and decisionmakers Study/project sponsors should work w/FTA to clarify New Starts criteria and evaluation process for public and decisionmakers

New Starts Project Achieve an Acceptable Rating Before NEPA Final Doc/Decision “Require a New Starts project to achieve an acceptable New Starts rating before the FEIS, ROD, or FONSI is signed” “Require a New Starts project to achieve an acceptable New Starts rating before the FEIS, ROD, or FONSI is signed” Rationale Rationale Low rating = no New Starts funding recommendation = no Federal action Low rating = no New Starts funding recommendation = no Federal action Scope changes should be addressed within the NEPA process Scope changes should be addressed within the NEPA process Final NEPA document must present a project that FTA can fund. Final NEPA document must present a project that FTA can fund. FTA cannot issue a final NEPA document knowing that its supplementation or reevaluation of scope change is mandatory FTA cannot issue a final NEPA document knowing that its supplementation or reevaluation of scope change is mandatory

New Starts Project Achieve an Acceptable Rating Before NEPA Final Doc/Decision Comments – significant opposition Comments – significant opposition Could prejudice the NEPA process Could prejudice the NEPA process NEPA delays could: NEPA delays could: Delay ROW acquisition, which could result in cost escalation Delay ROW acquisition, which could result in cost escalation Prohibit project from securing, and/or advancing in development with, other funding Prohibit project from securing, and/or advancing in development with, other funding Should be subject to rulemaking Should be subject to rulemaking Policy Guidance Does Not Implement this Requirement, Except Where Supplemental NEPA Documentation is Certain Policy Guidance Does Not Implement this Requirement, Except Where Supplemental NEPA Documentation is Certain For all other projects, RODS/FONSIs to include a “New Starts Finding” For all other projects, RODS/FONSIs to include a “New Starts Finding”

Preservation of Information for Before and After Study “Require project sponsors to provide documentation of the information produced during alternatives analysis that will be needed for the required B and A study, when they apply to begin PE, as well as updated information and analyses at the time of the request to enter into final design and before executing an FFGA” “Require project sponsors to provide documentation of the information produced during alternatives analysis that will be needed for the required B and A study, when they apply to begin PE, as well as updated information and analyses at the time of the request to enter into final design and before executing an FFGA” Rationale Rationale Ensures the availability of data for subsequent B and A study Ensures the availability of data for subsequent B and A study Consistent with FTA objectives for review of AA technical information Consistent with FTA objectives for review of AA technical information “Real time” rather than retrospective analysis “Real time” rather than retrospective analysis Consistent with Congressional intent Consistent with Congressional intent

Preservation of Information for Before and After Study Comments – generally supportive Comments – generally supportive More guidance and training is necessary More guidance and training is necessary Costs of conducting the BnA Study should be an eligible expense Costs of conducting the BnA Study should be an eligible expense Economic development and land use should be required characteristics of the BnA Study Economic development and land use should be required characteristics of the BnA Study Policy Guidance Implements this Requirement Policy Guidance Implements this Requirement Project sponsors should identify the contractor responsible for cost and ridership estimates and describe contractor’s role (in support of FTA contractor assessment report) Project sponsors should identify the contractor responsible for cost and ridership estimates and describe contractor’s role (in support of FTA contractor assessment report)

Certification of Methods, Assumptions and Procedures “Require that the individuals identified on Template 1 as the person responsible for developing these tools and techniques, in addition to the CEO, certify that they have been properly developed and applied according to professional standards and conventions and FTA guidelines” “Require that the individuals identified on Template 1 as the person responsible for developing these tools and techniques, in addition to the CEO, certify that they have been properly developed and applied according to professional standards and conventions and FTA guidelines” Rationale Rationale Improve the reliability of technical information used to support decisionmaking and justification for New Starts projects Improve the reliability of technical information used to support decisionmaking and justification for New Starts projects Better ensure “level playing field” for FTA’s evaluation of candidate projects Better ensure “level playing field” for FTA’s evaluation of candidate projects Consistent with Congressional intent Consistent with Congressional intent

Certification of Methods, Assumptions and Procedures Comment – Significant opposition Comment – Significant opposition No one individual can be identified as responsible for work. No one individual can be identified as responsible for work. Risk of professional liability and Federal prosecution. Risk of professional liability and Federal prosecution. No industry-accepted standards. No industry-accepted standards. FTA reviews obviate the need for certification. FTA reviews obviate the need for certification. Policy Guidance Does Not Implement this Requirement Policy Guidance Does Not Implement this Requirement Modest update to long-standing certification statement Modest update to long-standing certification statement

Identification of Uncertainties in Costs and Ridership Forecasts “Require forecasts of costs and benefits to include an analysis of uncertainties” “Require forecasts of costs and benefits to include an analysis of uncertainties” Rationale Rationale Responds to SAFETEA-LU emphasis on reliability of estimates of costs and benefits Responds to SAFETEA-LU emphasis on reliability of estimates of costs and benefits Supports requirement for Contractor Performance Assessment reporting Supports requirement for Contractor Performance Assessment reporting Acknowledges elements of uncertainties for strengthening decisionmaking and focusing project development activities Acknowledges elements of uncertainties for strengthening decisionmaking and focusing project development activities

Identification of Uncertainties in Costs and Ridership Forecasts Comments – Generally opposed, seeking more clarification Comments – Generally opposed, seeking more clarification All risk can never be eliminated and so too great a focus on it is not productive All risk can never be eliminated and so too great a focus on it is not productive FTA should delay implementation of this requirement until guidance is issued that defines how uncertainties should be characterized FTA should delay implementation of this requirement until guidance is issued that defines how uncertainties should be characterized Unclear how uncertainties would be presented for cost effectiveness Unclear how uncertainties would be presented for cost effectiveness Policy Guidance Does Not Implement this Requirement Policy Guidance Does Not Implement this Requirement FTA will issue guidance on reporting of risks and uncertainties at a later date FTA will issue guidance on reporting of risks and uncertainties at a later date In interim, sponsors strongly encouraged to report uncertainties In interim, sponsors strongly encouraged to report uncertainties

Project Development Agreements “At FTA’s discretion, selectively require project development agreements (at time of PE and/or FD approval)” “At FTA’s discretion, selectively require project development agreements (at time of PE and/or FD approval)” Rationale Rationale Provides mutually agreed upon yardstick for measuring progress in project development Provides mutually agreed upon yardstick for measuring progress in project development Focuses project sponsors effort/FTA oversight upon principal issues Focuses project sponsors effort/FTA oversight upon principal issues Provides basis for FTA rescission of PE/FD approval Provides basis for FTA rescission of PE/FD approval

Project Development Agreements Comments – Some support, but majority requested further information Comments – Some support, but majority requested further information When required? What criteria would be used to determine if necessary? When required? What criteria would be used to determine if necessary? Concern that PDA’s, at FTA’s discretion, could result in inequitable treatment of projects Concern that PDA’s, at FTA’s discretion, could result in inequitable treatment of projects PDAs will delay projects PDAs will delay projects Could be partnering agreements, if not used punitively Could be partnering agreements, if not used punitively Existing procedures are already in place to achieve PDA objectives Existing procedures are already in place to achieve PDA objectives Policy Guidance Does Not Implement this Requirement Policy Guidance Does Not Implement this Requirement PDAs will be developed and executed when mutually agreeable PDAs will be developed and executed when mutually agreeable

New Starts Funding Level Set at Final Design Approval “Place a cap on the FFGA New Starts funding amount at the point of approval to enter final design” “Place a cap on the FFGA New Starts funding amount at the point of approval to enter final design” Rationale Rationale Consistent with Congressional intent Consistent with Congressional intent Clarifies FTA participation in project costs Clarifies FTA participation in project costs Supports decisionmaking Supports decisionmaking

New Starts Funding Level Set at Final Design Approval Comments – Slight majority opposition, but some support and some suggested alternatives Comments – Slight majority opposition, but some support and some suggested alternatives Concern that approach would inhibit innovative contracting Concern that approach would inhibit innovative contracting Concern that approach would inhibit traditional approaches Concern that approach would inhibit traditional approaches Cap costs at some percentage higher than PE cost estimate Cap costs at some percentage higher than PE cost estimate Entry into Final Design should become the trigger for negotiating an FFGA Entry into Final Design should become the trigger for negotiating an FFGA Allow for some exceptions due to unavoidable cost increases Allow for some exceptions due to unavoidable cost increases Policy Guidance Implements this Requirement, with Modification Policy Guidance Implements this Requirement, with Modification

New Starts Funding Level Set at Final Design Approval Expanded definition and eligible activities for “New Starts Preliminary Engineering” Expanded definition and eligible activities for “New Starts Preliminary Engineering” Once approved into final design, projects not subject to changes in New Starts program Once approved into final design, projects not subject to changes in New Starts program “PE Exit Criteria” being developed to further clarify completion of PE “PE Exit Criteria” being developed to further clarify completion of PE FTA will consider unanticipated cost increases after final design approval (natural disasters, unforseen significant commodity market fluctuations, etc.), but not execution of FFGA FTA will consider unanticipated cost increases after final design approval (natural disasters, unforseen significant commodity market fluctuations, etc.), but not execution of FFGA

Possible Rules for Mode-Specific Constants “Require all project sponsors to use pre-established mode-specific constants for each of the included attributes (reliability, span of service, and passenger amenities) that appear to be prominent in a specific fixed-guideway proposal” “Require all project sponsors to use pre-established mode-specific constants for each of the included attributes (reliability, span of service, and passenger amenities) that appear to be prominent in a specific fixed-guideway proposal” Rationale Rationale Acknowledges and captures heretofore ignored non- transportation (time and cost) attributes of fixed guideway projects for areas considering new guideway modes Acknowledges and captures heretofore ignored non- transportation (time and cost) attributes of fixed guideway projects for areas considering new guideway modes Enhances consistent treatment of projects nationally Enhances consistent treatment of projects nationally Improves reliability of travel forecasts by mitigating against poorly-estimated constants (“correction factors”) Improves reliability of travel forecasts by mitigating against poorly-estimated constants (“correction factors”)

Possible Rules for Mode-Specific Constants Comment – Generally supportive, but more information needed Comment – Generally supportive, but more information needed Option 2 (specific value for each guideway mode) was preferred Option 2 (specific value for each guideway mode) was preferred Defensible locally-derived and validated constants should be permitted Defensible locally-derived and validated constants should be permitted A panel of experts should be convened to establish constant values A panel of experts should be convened to establish constant values More information needed before “standard” constant values are implemented. More information needed before “standard” constant values are implemented. Policy Guidance Does Not Implement this Requirement Policy Guidance Does Not Implement this Requirement

Cost Effectiveness Breakpoints Based on DOT Guidance on the Value of Time Based on DOT Guidance on the Value of Time Original breakpoints reflected Year 2000 data: Original breakpoints reflected Year 2000 data: (50% * Annual MHI ($42,148))/ (hourly factor (2000)) = $10.54 per hour $10.54 * highway benefits (1.2) * indirect benefits (2.0) = $25.00 per hour Adjusted Annually by GDP Deflator Adjusted Annually by GDP Deflator

Cost Effectiveness Breakpoints

Contractor Performance Assessment Report SAFETEA-LU Provisions Secretary shall submit a report to Congressional committees analyzing the consistency and accuracy of cost and ridership estimates made by each contractor to public transportation agencies developing new fixed guideway capital projects Secretary shall submit a report to Congressional committees analyzing the consistency and accuracy of cost and ridership estimates made by each contractor to public transportation agencies developing new fixed guideway capital projects Report should compare the cost and ridership estimates at PE approval with estimates made at FD approval, commencement of revenue operation and 2 years afterward Report should compare the cost and ridership estimates at PE approval with estimates made at FD approval, commencement of revenue operation and 2 years afterward Comparisons should take into consideration factors not under control of the contractor Comparisons should take into consideration factors not under control of the contractor

Contractor Performance Assessment Report Implementation In effect for all PE requests subsequent to May 22 In effect for all PE requests subsequent to May 22 Required information: Required information: Ridership forecasts, service levels, underlying assumptions, uncertainties Ridership forecasts, service levels, underlying assumptions, uncertainties Cost estimates, plans/profiles, design standards, uncertainties Cost estimates, plans/profiles, design standards, uncertainties Identification of responsible parties and roles Identification of responsible parties and roles Reporting format available from FTA Reporting format available from FTA Information reported at subsequent milestones Information reported at subsequent milestones Report annually to Congressional committees Report annually to Congressional committees Performance assessment will be project-specific, not overall assessment of firm Performance assessment will be project-specific, not overall assessment of firm

New Starts Reporting Instructions No significant changes to reporting No significant changes to reporting New Starts Baseline Principles and Cost Parameters New Starts Baseline Principles and Cost Parameters Updated Standard Cost Categories Updated Standard Cost Categories Updated CEO Certification Updated CEO Certification “Linked” New Starts Templates “Linked” New Starts Templates

Schedule for FY 2008 New Starts Reporting July 14 (requested): Any changes to New Starts Project Justification Criteria “inputs” since last FTA evaluation July 14 (requested): Any changes to New Starts Project Justification Criteria “inputs” since last FTA evaluation Travel Forecasts Travel Forecasts Capital Costs (Build and Annualized Baseline) Capital Costs (Build and Annualized Baseline) O/M Cost Methodology O/M Cost Methodology Annualization Factor Annualization Factor August 18: Formal New Starts submission (templates, land use, financial info) August 18: Formal New Starts submission (templates, land use, financial info) September 30: Latest that FTA can consider new/updated/revised information September 30: Latest that FTA can consider new/updated/revised information

FY 2008 New Starts Evaluation Process Consistent with FY 2007 Process Consistent with FY 2007 Process Updated Cost Effectiveness Breakpoints Updated Cost Effectiveness Breakpoints Consideration of Economic Development as an “Other Factor” Consideration of Economic Development as an “Other Factor”