"NEW STARTS"
The main source of federal funding for new transit capital projects is the federal "New Starts" program. To obtain New Starts funding, a project must complete an "alternatives analysis," engineering and design studies, and ultimately must be recommended for funding by the Federal Transit Administration and approved for funding by the Congress. Among other things, projects must demonstrate that they will improve mobility, provide environmental benefits, offer land use planning that supports transit, and be cost-effective (see bottom of page for more detail).
Under current law, the availability of New Starts funding for BRT is artificially limited. New Starts funding is available only to projects that operate solely in a "fixed guideway," which is defined as a separate right-of-way. However, BRT can operate either on or off of a fixed guideway. In other words, BRT's flexibility presents a challenge to receiving New Starts funding because of the artificial "fixed guideway" requirement in the statute.
It's time for the New Starts program to provide funding based upon the performance of the proposed system, not upon artificial definitions of what constitutes a "fixed guideway."
What the Critics Say
It's important to fund only fixed guideway projects, because they offer the greatest potential relieve congestion and improve the environment. Not true. A recent report by the National Academies of Science shows that BRT can meet or exceed the congestion and environmental benefits of rail. BRT should be allowed to compete in the rating process so that communities can choose the right investment for them.
Adding BRT to New Starts will put additional stress on a program that is already over-stressed. Not true. New Starts is stressed because the demand for projects far exceeds the funds available in the program. However, the fixed guideway projects that currently are eligible for the program are extremely expensive and take decades from concept to construction. Allowing lower cost alternatives into the program, like BRT, is a way to stretch program resources, because more projects can be built in a shorter timeframe and on a limited budget.
BRT will have an unfair advantage in the rating process. Not true. BRT would be subject to the same process and rating criteria as any other New Starts project. BRT projects should be allowed to compete for funding so that communities and the FTA can actually determine whether they meet the New Starts funding criteria.
Changing the fixed guideway requirement will mean that we are simply funding bus systems rather than true transit projects. Not true. As discussed above, all New Starts projects must meet specific criteria -- if these are not met, the BRT project will not be funded. Moreover, the fixed guideway requirement should be replaced with a performance standard, ensuring that any project considered for funding meets standards that far exceed the performance offered by traditional bus systems.
BRT will not encourage the same level of land-use development around stations as a fixed guideway system. Not true. A recent report by the National Academies of Science concluded that BRT has the same ability to attract economic development as rail.
Allowing BRT into the New Starts process will discourage further development of fixed guideway systems. Not true. In fact, BRT can be a transition to a fixed guideway system, or it can be a feeder into a fixed guideway system. BRT and rail projects are not mutually exclusive, but rather should be designed to work together, thus helping to meet the growing demand for transit.
By operating on the road instead of a fixed guideway, BRT will add to traffic problems. Not true. A BRT vehicle can take the place of dozens of cars and SUV's. Moreover, technologies like queue jumping and traffic signal priority allow BRT vehicles to move through traffic rather than block traffic.
OTHER POTENTIAL SOURCES OF FEDERAL FUNDING
Bus Capital Program. This program provides a large number of relatively small grants for bus improvements. In 2003, grants ranged in size from $30,000 to $16 million. A couple of BRT projects were allocated roughly $7.4 million and $7.9 million respectively. Generally, however, larger grants are for state-wide bus improvements, not individual projects. Although the Bus Capital Program is a good source of supplemental funds, there generally is not sufficient funding available to finance a BRT project exclusively with Bus Capital funds.
Urbanized Area Formula Grants. This program provides operating and capital funds for urbanized areas over 50,000 in population. If the urbanized area is over 200,000, the funds may only be used for capital investment. Like the Bus Capital Program, there is not enough funding here to finance a complete BRT system. Moreover, using these funds may take resources away from other important priorities.
Highway Funding. New road capacity built using federal highway funds may provide right-of-way for a BRT system. Moreover, there are "flexible" spending programs that can use federal highway dollars for a variety of purposes, including transit. These programs include the Congestion Mitigation and Air Quality Program and the Surface Transportation Program.
PRIVATE FINANCING
This is an interesting possibility being explored in a few regions. Essentially, a toll road is constructed using private financing, usually bonds. The road is managed as a high occupancy toll ("HOT") lane, with tolls set depending on the level of congestion. If congestion increases, tolls are increased to ensure that traffic remains free-flowing. The bonds are repaid through toll revenue, and the toll road is open to BRT vehicles. Thus, a congestion-free right of way is constructed for a BRT system without using public tax dollars. Innovative financing like this is not available with rail, because the rail right-of-way is available only to the transit vehicle.
Before approving any New Starts funding, proposals must go through a specific process designed to evaluate and rate the proosal against specific factors set forth by law. The New Starts process can be briefly summarized as follows:
Procedural: There are four general stages to a New Starts project: (1) alternatives analysis, (2) preliminary engineering, (3) final design, and (4) construction. New Starts funding is available after steps 1 and 2 are complete.
The alternatives analysis is designed to assess the transportation options available to the community and to produce a locally preferred alternative (LPA), which is the community's desired project. Preliminary engineering is designed to refine the project's design, scope, and estimated cost. FTA approval is required prior to entering preliminary engineering.
Once preliminary engineering is complete, a project can receive New Starts funding for final design and construction.
Justification: "Justification" refers to criteria that FTA is required to consider when evaluating a New Starts project. Justification is developed as part of the first stage (alternatives analysis) and is refined throughout the New Starts process. The justification criteria are: (1) improvements in mobility; (2) environmental benefits; (3) operating efficiencies; (4) cost effectiveness; (5) transit supportive land use; and (6) "other" factors, such as technical capacity to build and operate the project. The more a particular project can show in each of these areas, the more likely it will receive funding.
Local Financial Commitment: This criterion measures the local commitment to providing financial support for the project. Like "justification," local financial commitment is initially developed during the alternatives analysis stage and is refined and honed throughout the New Starts process.
Each project criteria is assessed and assigned a rating. Based upon the criteria ratings, the overall project receives a rating of either Highly Recommended, Recommended, or Not Recommended. Only Highly Recommended or Recommended projects are eligible for New Starts funding.
To actually receive funding, however, a project must be submitted by FTA to Congress for inclusion in FTA's annual budget. To be included on FTA's list, a project must be far enough along that it can be considered for a full funding grant agreement (FFGA), which is FTA's mechanism for providing financial support for multi-year capital investment projects.
For more information about FFGA's and the New Starts process, please click here.
