NPRM Overview, Subpart A and Discussion Items for Comment

1. NPRM Overview, Subpart A and Discussion Items for Comment New/Small Starts Outreach Session Charlotte, NC October 9, 2007 Rich Steinmann Assistant to the Administrator

2. Outline for the Session • Overview, Discussion Items, Subpart A - Brigid Hynes-Cherin • Subpart B, New Starts – Rich Steinmann • Subparts C and D, Small Starts - Sean Libberton • Policy Guidance, Measures – Ron Fisher

3. Overall Purpose of the Session • Describe the key provisions of the NPRM and the policy guidance on measures • Highlight proposed changes from the existing regulation and policy • Answer questions to clarify provisions and provide the underlying rationale • Encourage substantive comments to the docket – comments made at this session are not official – comments due November 1, 2007

4. Tips for Submitting Effective Comments • Demonstrate an understanding of the FTA rationale for the proposed provision • Provide coherent discussion of reasons for supporting/opposing the provision • Provide cogent description of any proposed changes to provision • OR suggest a different alternative

5. Underlying Principles Used to Develop the NPRM and Policy Guidance • Projects admitted into PE have resolved all planning issues and have realistic and reliable forecasts of costs, benefits and impacts • Measures are objective, based on established research, and respond to statutory criteria • Project sponsors have the capability to generate information for measures

6. Difference in Effect of NPRM versus Policy Guidance • NPRM • Describes eligibility, criteria and key weights, ratings and project development process • Changes require an amendment to the rule • Policy Guidance on Evaluation Measures • Describes weights and measures not referenced in NPRM and how they will be applied for ratings • Changes require notice and comment before issuing revised policy guidance

7. NPRM Contents • Guidance on New Starts Policies and Procedures (issued Jan ‘06) • 38 questions with comments, FTA responses and proposals • ANPRM for Small Starts (issued Jan ‘06) • 20 questions with comments, FTA responses and proposals • Section-by-Section Analysis • Additional Discussion Items for Comments • NPRM Content

8. NPRM Organization • Subpart A – General Provisions - Purpose and contents - Applicability - Definitions - Measures of reliability in the Section 5309 capital investment evaluation and rating process

9. NPRM Organization • Subpart B/C/D – New Starts/Small Starts/Very Small Starts - Eligibility - Project justification criteria - Local financial commitment criteria - Overall project ratings - Project development process

10. Discussion Item 1. Expand the definition of fixed guideway • In addition to SAFETEA-LU changes, include facilities that achieve free-flow conditions through pricing, such as HOT lanes • If transit uses a barrier-separated ROW AND • 95% of the transit vehicles using the facility will maintain an average speed of not less than 5 MPH below posted speed limit • Funds could only be used to construct that portion of the facility that benefits transit and only if it meets New Starts criteria • Definition does not alter “fixed guideway mile” for purposes of calculating distribution of funds under the formula program

11. Discussion Item 2. Cost effectiveness must include all “essential project elements” • If all elements needed to generate forecast year demand are not included, FTA will not rate project, however • What constitutes a “betterment” which is appropriately funded with local funds • Can improvements needed beyond the planning time frame be included in the financial plan and CE calculation but not the FFGA application (“rightsizing”)

12. Discussion Item 3. Use an extremely simplified evaluation framework for Small Starts • Use financial commitment as a readiness condition, not a rating factor • Rate projects as high, medium or low for project justification (PJ) • Assess both CE and economic development /land use as either “pass” or “fail” • Two “pass” ratings yield high PJ rating, CE “pass” yields medium, CE “fail” or two “fails” yield low • PJ rating modified by reliability rating to get five tier overall rating • Less able to distinguish between projects although identifies projects with most potential

13. Discussion Item 4. Federal investments should contribute to reducing congestion • Ratings will take into account whether • the project is supported by a variable pricing strategy • there are any measurable highway travel time savings • there is improved mobility (reduction in highway VMT weighted by a factor for highway congestion) • Need input on • Implications for transit of measuring congestion reduction benefits • Ways to measure highway benefits and improved mobility • Improving current travel models to produce better results and more consistent estimates

14. Discussion Item 5. Incentives to increase the use of PPPs • Ratings take into account • Innovative contractual arrangements to reduce operating costs • Need input on • Assuming an otherwise acceptable cost effectiveness rating, should “betterments” funded by private sector (not “in kind contribution” but private equity) be excluded from cost effectiveness measure? • Examples include • additional station entrances • improvements to station design beyond standards • changes in vertical or horizontal alignment • Alternatively, should all private capital be excluded from the cost effectiveness measure?

15. Discussion Item 6. Include measures in the final rule • If measures are included in the rule instead of a separate policy guidance than any change in measures would require an amendment to the rule in order to change the measures • Can we develop better measures over time that should be implemented in a timely manner? • Are we better served by stability in the measures?

16. Discussion Item 7. Better quantify project benefits • What methodology would forecast the benefits that accrue from the interaction of the proposed project and road pricing? • What methodology could be deployed to quantify any additional economic development/land benefits resulting from the project, that are not already included in the user benefits, and what would it measure?

17. Discussion Item 7. (continued) • Current Land Use (LU) measures • Likelihood of additional development • Likelihood of project achieving ridership forecasts • Magnitude of local support as reflected in plans, policies and past performance • Combined EconDev/LU Measures • Extent current land use is ripe for development • Transit-oriented plans and policies • Economic development climate in the corridor • Increased transit accessibility of the project • Economic lifespan of the project

18. Discussion Item 7 (continued) • Benefits not currently measured • Forecast of projected development • The trip not taken and/or shorter trips • Economic/Social effects of TOD • Reduction in the cost of delivery of other public services, e.g. more compact utility location • How to quantify measures • Ability to include in cost effectiveness

19. Subpart A: General Provisions • Purpose and content on Part 611 • Applicability of Part 611 • Definition of terms • Consideration of measures of reliability

20. Subpart A: Applicability • Part 611 applies to all projects seeking New Starts/Small Starts funds unless at the time the final rule is issued : • The project has been approved into FD, and there are no major project changes • The project was an exempt project ($25M or less) and requests funds appropriated prior to the final rule, as long as all other grant requirements are met

21. Subpart A: Key Definitions Fixed Guideway System: – facility in separate ROWor rail for exclusive use by public transportation or high occupancy vehicles for at least 50% of its length NEW! OR – uses ROW usable by other forms of transportation but has a fixed catenary system OR – is a corridor based bus (for Small Starts), having at least 50% of its length as fixed guideway during peak periods OR

22. Subpart A: Key Definitions Fixed Guideway System (con’t) – represents a substantial investment in a defined corridor OR – uses a barrier-separated ROW and 95% of the transit vehicles using the facility will maintain an average speed of not less than 5 MPH below posted speed limit. (definition does not alter that for “fixed guideway mile” for the formula program) NEW!

23. Subpart A: Key Definitions TSM alternative: – …”At a minimum it must be more cost effective as compared to the no build alternative than the New or Small Start project compared to the no build alternative”…. NEW! –

24. Subpart A: Measures of reliability in the evaluation and rating process • Measures and their ratings will be applied to each project justification and local financial commitment criterion rating increasing or decreasing the criterion rating • Reliability measures are identified in the policy guidance

25. Notice of Proposed Rulemaking – New Starts Ron Fisher Director, Office of Project Planning Office of Planning and Environment

26. NPRM Topics To Be Covered • Eligibility • Project justification • Local financial commitment • Overall project rating • Project development

27. New Starts Eligibility • Project is based on the results of an alternatives analysis • Total project cost ≥ $250M OR New Starts Funding ≥ $75M • At least 50% of the project length operating on a fixed guideway in the peak period NEW! • May not be subdivided into Small or Very Small Starts NEW!

28. New StartsProject Justification Rating Project Justification • Other Factors • MTC • Cong. Pricing Cost Effectiveness (50%) Effectiveness (50%) Mobility Econ Dev / Land Use Transit Dep. Mobility Env. Benefits 40% 10% 10% 40%

29. New StartsProject Justification Rating Cost Effectiveness (CE) • Definition Annualized Capital and Operating Costs Transportation System User Benefits • Breakpoints for ratings adjusted annually in the Reporting Instructions • Operating efficiencies no longer explicit evaluation criteria; inherent in CE

30. New StartsProject Justification Rating Effectiveness – Mobility (40%) NEW! • Mobility for general population, including congestion relief • Congestion relief based on degree to which project reduces highway travel demand and the relative level of congestion in the corridor based on estimated delay

31. New StartsProject Justification Rating Effectiveness – Econ. Dev/ Land Use (40%) NEW! • Extent to which current land use is ripe for development • Transit-oriented plans and policies • Economic development climate in the project corridor • Increase in transit accessibility offered by the project • Economic lifespan of the project

32. New StartsProject Justification Rating Other Factors • Make the Case always rated • Project is a principle element in a congestion management/pricing strategy • Additional Factors • Any factor the project sponsor believes not captured elsewhere in project justification criteria • Any factors the Secretary decides important

33. New Starts Local Financial Commitment Rating Local Financial Commitment Capital Finance Plan (50%) Operating Finance Plan (50%)

34. New Starts Overall Project Rating • 5 Level Rating Scale: High, Medium-High, Medium, Medium-Low, and Low • Ratings will be given: • When the project moves from one step to the next –OR– • If the project has experienced significant changes for the Annual report –OR– • If the project is being considered for a funding recommendation • Must receive at least a “medium” to move from one step to the next or to receive a funding recommendation • Both the project justification and local financial commitment rating must be a “high, medium-high, or medium” in order to achieve an overall project rating of a “high, medium-high, or medium” NEW!

35. New Starts Project Development Process Application Evaluation / Review Time Upon receipt of a complete formal request… • PE • FTA will complete an application evaluation within 30 days • FD • FTA will complete an application evaluation within 120 days

36. New Starts Project Development Process Definition of Preliminary Engineering: Finalization of project scope, cost and financial plan so that: • NEPA is concluded • Design is sufficient to obviate significant unknown costs • Cost estimate supports financial plan • Credible, relevant, identifiable and cost effective industry practices can be applied in FD

37. New Starts Project Development Process Preliminary Engineering Entry Requirements: • AA is complete • FTA has approved the baseline alternative • Project sponsors must demonstrate adequate technical capacity to carry out PE • NEPA scoping complete • Proposed project adopted into regional transportation plan Before and After Study Requirements: • Develop preliminary plan to conduct Before and After Study • AA data and an analysis of uncertainties required for Before and After Study must be submitted • Identify entity responsible for each forecast or estimate Note: Funding for collection and analysis of data related to the Before and After Study may be included (up to 80%) in the project’s eligible funding expenses.

38. New Starts Project Development Process NEW! Preliminary Engineering Entry Requirements: • Independent endorsement received from potential funding partners • Travel demand models validated against a survey of transit riders not more than 5 years old • Execute project development agreement (PDA) with FTA

39. New Starts Project Development Process Final Design Entry Requirements: • NEPA process complete • All conditions for completion of PE met • If significant changes to project definition or cost have occurred in PE, the project must be reaffirmed in the regional plan NEW! • FTA and project sponsor have agreed on exact amount of funding sought NEW! Before and After Study Requirements: • Project data through end of PE must be submitted to FTA • Finalize plan to conduct Before and After Study NEW! • Any changes in scope, costs, service levels, or ridership from AA estimates should be analyzed and documented in a memo. • Identify entity responsible for each forecast or estimate

40. New Starts Project Development Process Full Funding Grant Agreement: • Projects that meet or exceed requirements are eligible but not guaranteed to receive a funding recommendation • Incentive Clause NEW! – FTA will process an amendment for incentive funds AFTER project is complete and operating IF: • Actual opening year ridership no less than 90% of forecast AND actual capital costs are not more than 110% of that estimated upon entry into PE • No outstanding issues exist that may interfere with successful implementation of the project • At least medium cost effectiveness rating to be recommended for funding

41. New Starts Project Development Process Full Funding Grant Agreement (Con’t): Before and After Study Requirements: • Prior to construction activities, collect before data if not collected as part of final design • Two years after project opens for revenue service, collect after data • Submit report analyzing findings and include supporting data no later than 30 months after project opened for revenue service NEW!

42. Notice of Proposed Rulemaking – Small and Very Small Starts Sean Libberton Chief, Analysis Division Office of Planning and Environment

43. FTA’s Proposed Approach to Small and Very Small Starts • Adopt a Simplified Version of existing New Starts process for Small Starts • Implement a “Warrants” system for Very Small Starts

44. FTA’s Proposed Approach to Small and Very Small Starts How Small and Very Small Starts differ from New Starts: • AA could contain few alternatives, use forecasts of transportation benefits with simplified methods and address project opening, not 20-year forecasts (Small Starts only) • Land use submission reduced for project justification (Small Starts only) • No final design approval • Simplified PMP and cost reviews • Simplified PCGA

45. NPRM Topics To Be Covered • Eligibility • Project justification • Local financial commitment • Overall project rating • Project development

46. Small Starts Eligibility • Project is based on the results of an alternatives analysis • Total cost < $250M AND request for Small Starts funding < $75M • May not be part of a larger New Starts project; all potential Small Starts envisioned for a corridor will be considered as a single project.

47. Small Starts Eligibility • At least 50% of the project length operating on a fixed guideway in the peak period –OR– • Be a corridor based bus project with the following elements: • Substantial transit stations • Traffic signal priority / pre-emption • Low floor buses or level boarding • Branding of the proposed service • 10 min peak / 15 min off-peak headways for at least 14 hours a day

48. Very Small Starts Eligibility Must Meet All of the Preceding Requirements Plus: • Total cost of less than $50 million • Less than $3 million/mile (exclusive of rolling stock) • Ridership of 3,000 or more on an average weekday • May not be part of a larger New Starts project; all potential Very Small Starts in a corridor will be considered as a single project.

49. Small StartsProject Justification Rating Project Justification • Other Factors: • MTC • Cong Pricing Cost Effectiveness (50%) Effectiveness (50%) Mobility Econ dev/LU 60% 40%

50. Small StartsProject Justification Rating Cost Effectiveness (CE) • Definition Annualized Capital and Operating Costs Transportation System User Benefits • Breakpoints for ratings adjusted annually in the Reporting Instructions