1. 1 Perspectives on Reauthorization Robert Tuccillo Associate Administrator for Budget and Policy/ CFO Federal Transit Administration State of Good Repair Roundtable July 10, 2009

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4. 4 The Problem $80 Billion needed to catch up: Transit Investment Backlog (Billions of $2008) Facilities$13.7 Guideway Elements$25.4 Stations$10.3 Systems$19.0 Vehicles$11.8 Total$80.1

5. 5 $16 B $9.3 B

6. 6 So What? Haven’t we always underinvested? – Average conditions are OK now What if we don’t keep up with needs? – Safety suffers – Service quality/reliability suffers Transit loses its chance with the public to be the mode of choice

7. 7 The Solution? More dedicated and stable funding – Federal – State and local – Directly generated Lower cost through better asset management Private investment

8. 8 Funding Variation 20052006 Percent Change California$1.4 billion$2.2 billion+57.8% Colorado$0$21.8 million Georgia$8.2 million$4.7 million-43% New Mexico$2.8 million$35.7 million+1,160% North Carolina $112 million$66 million-41% Oregon$26 million$36 million+38% Virginia$158 million$268 million+70%

9. 9 Private Investment Can provide financing and management expertise “up front” Use public revenue stream availability payment to pay contractor Private sector brings efficiency and innovation Can result in 15%-30% lifecycle cost savings over conventional delivery method

10. 10 Value for Money Comparator Model P3 approach viable only if “value for money” associated with risk transfer is positive. Risk Costs Optimal Risk Transfer Challenge Balancing Risk with Costs

11. 11 FTA Fixed Guideway Formula Current Fixed Guideway Modernization formula is a mix of: – Seven funding tiers – Lump-sum funding allocations – Formula-based allocations (40% by route miles and 60% by vehicle revenue miles) Current allocation tends to favor newer and some commuter rail systems Urbanized Area TypeTotal FY08 Funding 20-Yr Annual Investment Needs % of Needs Addressed Legislatively Specified Areas HR $ 457,879,174 $ 5,437,716,0408% CR $ 533,137,288 $ 2,431,909,77722% LR $ 41,443,240 $ 291,348,16214% Total $ 1,032,459,703 $ 8,160,973,98013% Other Urbanized Areas HR $ 145,273,217 $ 685,338,30821% CR $ 106,529,787 $ 154,322,91369% LR $ 65,912,901 $ 204,558,86232% Total $ 317,715,904 $ 1,044,220,08330% All Areas HR $ 603,152,391 $ 6,123,054,34810% CR $ 639,667,075 $ 2,586,232,69025% LR $ 107,356,141 $ 495,907,02422% Total $ 1,350,175,607 $ 9,205,194,06315% Comparison of Current Funding Allocation with Estimated Needs

12. 12 FTA Asset Management Portfolio National Transit Database – Annual reports from 650+ FTA grant recipients – Data operating expenses, rolling stock, ridership, safety, and some fixed assets Other asset data collection – Grants management databases (TEAM) – Special data collection for biannual Conditions and Performance Report to Congress (C&P) Transit Economic Requirements Model (TERM) Financial analysis and other special studies

13. 13 Options Fixed Guideway Funding Formula Modifications – Revise the current funding tiers and formula factors to more evenly match funding with reinvestment needs – Vehicle revenue miles, track miles by grade type and tiers by rail system age provide effective allocation basis – Revised formulas should cover roughly equal proportion of each grantee’s capital needs Temporary SGR Investment Fund – Create a temporary investment fund designed to eliminate the SGR backlog – Could be linked to SGR planning requirements – Would require $2.5 billion annually over 20 years to address the investment backlog of the nine study agencies. – Maintain Fixed Guideway Modernization formula to cover rail transit’s normal replacement needs

14. 14 Options (Continued) Technical Support for Asset Management – FTA provides technical assistance – Target areas include: Development and use of asset inventories (for capital planning purposes) Condition monitoring systems Decision support tools and multi-factor investment capital prioritization methods. Capital Asset Reporting – Industry would benefit from a National Transit Capital Asset reporting system that ensured: 1.Regular asset reporting and 2.A consistent structure and level of reporting across all urban transit agencies – Data supports better national needs assessments and transit asset condition monitoring than is currently possible

15. 15 Options (Continued) GANS Capital Leasing NIB SIBS TIFIA