Detailed Summary of Project Justification Criteria Changes in the Final New Starts / Small Starts Rule

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Detailed Summary f Prject Justificatin Criteria Changes in the Final Starts / Small Starts Rule On December 27, 2012, the Federal Transit Administratin published a final rule and prpsed plicy guidance cvering certain elements f its Starts and Small Starts capital investment prgrams. FTA identified tw gals fr the rule: t measure a wider range f benefits frm transit prjects and t streamline the Starts/Small Starts applicatin prcess. Changes intended t measure a wider range f benefits are utlined in the table belw. Streamlining is accmplished by: reducing the need fr cmparisns t a baseline allwing the use f warrants (prequalificatins based n prject r crridr characteristics) using a natinal mdel t calculate ridership Because the riginal prpsed rule was issued prir t passage f MAP-21, the final rule des nt include several changes made by the new law, such as: a methdlgy fr evaluating the new cngestin relief criterin the prcess fr evaluating cre capacity prjects the prcess fr evaluating prgrams f interrelated prjects details f the pilt prgram fr expedited prject delivery a prcess fr expedited review fr spnsrs f successful past prjects changes t the applicatin prcess resulting frm the eliminatin f alternatives analysis and reductin in the number f pints at which FTA rates prjects details fr hw and when warrants will be applied. While MAP-21 retained the Small Starts prgram, the new law requires Small Starts prjects t be rated n the same six prject justificatin criteria as Starts prjects. Small Starts evaluatins will still differ frm Starts evaluatins as fllws: MAP-21 requires evaluatin f Small Starts prject csts t cnsider nly the federal share, nt ttal prject csts lcal financial cmmitment is evaluated at pening year, nt n a 20-year hrizn expedited financial review is pssible fr prjects where csts are belw a certain percentage f the spnsr s annual budget While this dcument is fcused n changes t the prject justificatin criteria, the rule makes changes t the lcal financial cmmitment evaluatin as well. Lcal financial cmmitment is mdified by cmbining capital and perating cnditin int a single factr (currently they are cnsidered separately). Overmatch (when a spnsr prvides mre than 50% lcal share) raises the rating ne level, but spnsrs are nt penalized fr prviding less than 50% lcal share. Fllwing MAP-21 s language, the rule requires cnsideratin f private cntributins in the review f lcal funding cmmitment fr Starts prjects. The rule as published and final plicy guidance will g int effect April 9, 2013. Prjects already apprved int final design ( Starts) r prject develpment (Small Starts) will cntinue under the ld rules. Fr prjects in preliminary engineering, FTA will wrk with individual prject spnsrs t help them determine whether they are cvered by the new rule r the ld rule, based upn where they are in the NEPA prcess.

Starts/Small Starts Final Rule Prject Justificatin Criteria **The new evaluatin under the final rule is the same as that in the prpsed rule except fr items in bld **Items prpsed in the plicy guidance are in italics Criterin Old Evaluatin Old Evaluatin Cmments Mbility imprvements Transprtatin system user benefits (TSUB) per passenger mile n the prject, with additinal credit fr transit-dependent trips TSUB = measurable change in travel time, cmpared t a baseline alternative, ver a hrizn f 20 years, generally referred t as travel-time savings Baseline alternative = the best that can be dne withut a majr capital investment in new infrastructure Trips are estimated based n lcal r reginal travel frecasting mdels 20% Ttal linked trips n the prject, with each trip by a transit-dependent individual cunted twice. A linked trip is a trip made n the prject whether r nt the rider bards r alights n the prject r elsewhere in the transit system. N cmparisn t a baseline is required. FTA will develp a natinal mdel fr estimating prject trips using census data and actual ridership experience. If a prject spnsr chses, they can estimate trips using lcal travel frecasting mdels instead f FTA s mdel. Prject spnsrs can estimate trips fr the current year nly, r fr the current year and the hrizn year (10 r 20 years ut at the spnsr s discretin). If they chse t d bth the current year and the hrizn year, trips will be based n the ed (prpsed t be 50%/50%) average f current-year and hrizn-year. In FTA s natinal mdel, transit-dependence will be defined as husehlds that d nt wn a car; if a prject spnsr uses lcal mdels instead f FTA s natinal mdel, transit-dependence will be either zercar husehlds r the lwest incme level, whichever is used in the lcal mdel. 16.66% The current measure s fcus n travel-time savings benefits lnger prjects, which prvide mre f an pprtunity t save time. The prpsed change t number f trips n the prject wuld treat lnger and shrter prjects equally. The current requirement fr cmparisn t a baseline alternative requires significant expenditures f time n reaching agreement with FTA n the apprpriate baseline. The prpsed eliminatin f the baseline alternative wuld reduce the amunt f time prject spnsrs wuld need t spend n the applicatin. Using a natinal ridership mdel and requiring nly current year ridership estimates shuld als reduce time needed in the applicatin prcess, as FTA will n lnger need t review lcal travel mdels (unless a spnsr chses t use lcal mdels rather than the natinal mdel). Envirnmental benefits Prjects lcated in a nnattainment area fr air quality receive a high rating; prjects lcated in an attainment area receive a medium rating 10% Quantified by measuring dllar value f changes in: (1) Air-pllutant emissins, estimated using changes in VMT as a result f the prject (2) Greenhuse gas emissins, estimated using changes in VMT (3) Transprtatin energy use (nly benefits f reduced reliance n fuel, nt emissins-related benefits), estimated using changes in VMT 16.66% The key changes are t include multiple measures f envirnmental benefits and t cmpare them t the cst f the prject. This is designed t capture mre f the ptential benefits f transit prjects, and by cmparing the benefits t the csts, t get a mre useful measure fr 2

Criterin Old Evaluatin Old Evaluatin Cmments (4) Safety changes (transprtatin fatalities and injuries) estimated using changes in VMT and transit-passenger miles cmparisn acrss different prjects. cmpared t the annualized capital and perating cst f the prpsed prject minus enrichments fr Starts, r t the annualized federal share fr Small Starts prjects. Cmparisn wuld be t the existing envirnment in the current year, r at the ptin f the prject spnsr, t the current year and the n-build envirnment in the hrizn year. If a spnsr prepares a frecast based n a 10-year hrizn, the pint f cmparisn is the current transprtatin system plus prjects in the TIP. If the spnsr prepares a frecast based n a 20-year hrizn, the pint f cmparisn is all prjects included in the fiscally cnstrained lng-range transprtatin plan. The fcus n VMT change wuld benefit prjects that attract new riders r have lnger rutes. Prjects in transit-dependent areas wuld likely have less VMT reductin (but culd ptentially fare better n mbility, csteffectiveness, and ecnmic develpment criteria). FTA will develp a spreadsheet with standard cnversin factrs t calculate the dllar values f the elements abve. FTA s spreadsheet will cnvert prject trips (calculated under the mbility benefits criterin) int VMT reductin, but prject spnsrs may chse t calculate VMT reductin frm lcal travel frecasting mdels instead. FTA s spreadsheet will mnetize benefits s that thse gained in a nn-attainment area wuld be wrth mre than thse gained in an attainment area. FTA will estimate highway and transit VMT change based n transprtatin system users changing mdes ( first-rder effects ), nt based n changing land-use patterns r higher densities ( higher-rder effects ), althugh the ptinal scenari analysis in the ecnmic develpment criterin wuld allw a prject spnsr t cnsider these higher-rder effects. Changes in public health wuld be cnsidered nce better methds fr calculating thse effects are develped. 3

Criterin Old Evaluatin Old Evaluatin Cmments Cst effectiveness Measured by changes in annualized capital and perating cst f the prject per hur f travel time savings, cmpared t a baseline alternative 20% Incremental cst per trip n the prject. Trips wuld be calculated under mbility benefits, except that trips by transit-dependent individuals will nt receive extra fr this criterin. Csts include: (1) fr Starts: Annualized cst f the prject, including changes in capital, perating, and maintenance csts cmpared t the existing system, r at the prject spnsr s ptin, t the existing system in the current year and the n-build system in the hrizn year, minus the csts f enrichments (2) fr Small Starts: annualized federal share f the prject (where federal share includes all federal funds, nt just Small Starts funds) The prject spnsr may prepare nly current year frecasts, r current and hrizn-year frecasts (as in the envirnmental benefits criterin). 16.66% MAP-21 requires FTA t measure cst-effectiveness as cst per rider, which was cnsistent with the prpsed rule MAP-21 requires evaluatin f Small Starts prject csts t include nly the federal share, nt ttal prject cst The prpsed rule used the term betterments, which was changed t enrichments in the final rule. By subtracting enrichments frm the cst side f the equatin, FTA prpses t remve a disincentive t include these prject elements, which can have a direct effect n the success f the prject as a catalyst fr ecnmic develpment. Enrichments are csts fr elements that are nt required fr mbility but rather fster ecnmic develpment r envirnmental benefits: artwrk, landscaping, pedestrian and bicycle imprvements, sustainable building design elements (up t 2.5% f facilities cst), 50% f the cst f clean fuel buses, and jint develpment csts. FTA intends the list f enrichments in the prpsed plicy guidance t be an exclusive list. They d nt plan t allw prject spnsrs t request additinal types f enrichments n a case-by-case basis. Annualized capital csts will have a discunt rate f 2% rather than 7% t better reflect the lng-term nature f these assets. Ecnmic develpment effects Qualitative assessment f the transit-supprtive plans and plicies in place and demnstrated perfrmance and impact f thse plicies. 20% Qualitative assessment with an ptinal quantitative measure f likely future develpment utcmes resulting frm the prject Qualitative assessment cntinues the ld evaluatin methd and adds cnsideratin f the scial equity impacts f prjects by examining plans and plicies in place t maintain r increase affrdable husing in the crridr. 16.66% FTA fcuses this measure n the likelihd f the prject fstering develpment, rather than attempting t frecast hw much develpment will ccur. FTA staff indicated that they based the quantitative measure f 4

Criterin Old Evaluatin Old Evaluatin Quantitative measure (at the prject spnsr s ptin) includes indirect changes in VMT resulting frm changes in land use (imprved accessibility), with the resulting envirnmental benefits calculated, mnetized, and cmpared t the annualized capital and perating cst f the prject fr Starts prjects, and t the annualized federal share fr Small Starts prjects. Quantificatin wuld invlve examining the ecnmic cnditins in the crridr, mechanisms by which the prject wuld imprve thse cnditins, availability f land in statin areas fr develpment and redevelpment, and a pr frma assessment f the feasibility f specific develpment scenaris. Cmments ecnmic develpment effects n mnetized envirnmental benefits due t the lack f available tls t predict future ecnmic impact in quantifiable terms. They are pen t adding measures, e.g., a measure f agglmeratin benefits, nce such measures are develped. Land use Existing ppulatin and emplyment density, parking supply, and facilities fr pedestrians 20% Similar t ld evaluatin, with the additin f the amunt f affrdable husing currently in the crridr Affrdable husing includes legally binding affrdability restricted husing, which wuld be evaluated by cmparing such husing in the prject crridr with the regin s share verall f such husing. 16.66% The final rule uses the term affrdable husing rather than publicly supprted husing as in the NPRM t ensure that cnsideratin is given t mre than just federally-supprted public husing. Operating efficiencies Change in peratins and maintenance cst per passenger mile cmpared t the existing transit system in the current year, r the baseline transit system in the hrizn year. 10% This criterin was deleted by MAP-21 Cngestin Relief Passenger mile = number f passengers multiplied by annual revenue miles. N/A - criterin added by MAP-21. Evaluatin methdlgy will be addressed in future rulemaking. Until then, all prjects will receive a medium rating n this criterin. 16.66% Other factrs MAP-21 remved the Secretary s discretin t cnsider ther factrs 5

Additinal ntes: The final rule requires prject spnsrs t reprt the number f dmestic jbs related t design, cnstructin, and peratin f the prject, thugh these will nt factr int the evaluatin f the prject. Breakpints - the threshlds at which prjects are given particular ratings n a scale f lw, lw-medium, medium, medium-high, and high are published in prpsed plicy guidance accmpanying the rule. FTA will issue a subsequent rulemaking t cnsider hw t rll up the prject justificatin rating and the lcal financial cmmitment rating int an verall rating fr Starts prjects. Until then, FTA will cntinue ing bth prject justificatin and lcal financial cmmitment at 50%, and requiring at least a medium rating n bth t btain a medium r better rating verall. 6