THE FEDERAL TRANSIT ADMINISTRATIONS PROPOSED RULE ON THE

NEW STARTS AND SMALL STARTS

PROGRAMS
(11072)

HEARING
BEFORE THE

SUBCOMMITTEE ON
HIGHWAYS AND TRANSIT
OF THE

COMMITTEE ON
TRANSPORTATION AND
INFRASTRUCTURE
HOUSE OF REPRESENTATIVES
ONE HUNDRED TENTH CONGRESS
FIRST SESSION

SEPTEMBER 26, 2007

Printed for the use of the
Committee on Transportation and Infrastructure

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38168 PDF

2007

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COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE

JAMES L. OBERSTAR, Minnesota, Chairman
NICK J. RAHALL, II, West Virginia, Vice
JOHN L. MICA, Florida
Chair
DON YOUNG, Alaska
PETER A. DEFAZIO, Oregon
THOMAS E. PETRI, Wisconsin
JERRY F. COSTELLO, Illinois
HOWARD COBLE, North Carolina
ELEANOR HOLMES NORTON, District of
JOHN J. DUNCAN, JR., Tennessee
WAYNE T. GILCHREST, Maryland
Columbia
VERNON J. EHLERS, Michigan
JERROLD NADLER, New York
STEVEN C. LATOURETTE, Ohio
CORRINE BROWN, Florida
RICHARD H. BAKER, Louisiana
BOB FILNER, California
FRANK A. LOBIONDO, New Jersey
EDDIE BERNICE JOHNSON, Texas
JERRY MORAN, Kansas
GENE TAYLOR, Mississippi
GARY G. MILLER, California
ELIJAH E. CUMMINGS, Maryland
ROBIN HAYES, North Carolina
ELLEN O. TAUSCHER, California
HENRY E. BROWN, JR., South Carolina
LEONARD L. BOSWELL, Iowa
TIMOTHY V. JOHNSON, Illinois
TIM HOLDEN, Pennsylvania
TODD RUSSELL PLATTS, Pennsylvania
BRIAN BAIRD, Washington
SAM GRAVES, Missouri
RICK LARSEN, Washington
BILL SHUSTER, Pennsylvania
MICHAEL E. CAPUANO, Massachusetts
JOHN BOOZMAN, Arkansas
JULIA CARSON, Indiana
SHELLEY MOORE CAPITO, West Virginia
TIMOTHY H. BISHOP, New York
JIM GERLACH, Pennsylvania
MICHAEL H. MICHAUD, Maine
MARIO DIAZ-BALART, Florida
BRIAN HIGGINS, New York
CHARLES W. DENT, Pennsylvania
RUSS CARNAHAN, Missouri
TED POE, Texas
JOHN T. SALAZAR, Colorado
DAVID G. REICHERT, Washington
GRACE F. NAPOLITANO, California
CONNIE MACK, Florida
DANIEL LIPINSKI, Illinois
JOHN R. RANDY KUHL, JR., New York
DORIS O. MATSUI, California
LYNN A WESTMORELAND, Georgia
NICK LAMPSON, Texas
CHARLES W. BOUSTANY, JR., Louisiana
ZACHARY T. SPACE, Ohio
JEAN SCHMIDT, Ohio
MAZIE K. HIRONO, Hawaii
CANDICE S. MILLER, Michigan
BRUCE L. BRALEY, Iowa
THELMA D. DRAKE, Virginia
JASON ALTMIRE, Pennsylvania
MARY FALLIN, Oklahoma
TIMOTHY J. WALZ, Minnesota
VERN BUCHANAN, Florida
HEATH SHULER, North Carolina
MICHAEL A. ACURI, New York
HARRY E. MITCHELL, Arizona
CHRISTOPHER P. CARNEY, Pennsylvania
JOHN J. HALL, New York
STEVE KAGEN, Wisconsin
STEVE COHEN, Tennessee
JERRY MCNERNEY, California
LAURA A. RICHARDSON, California

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SUBCOMMITTEE ON HIGHWAYS, TRANSIT AND PIPELINES

PETER A. DEFAZIO, Oregon, Chairman
NICK J. RAHALL II, West Virginia
JOHN J. DUNCAN, JR., Tennessee
DON YOUNG, Alaska
JERROLD NADLER, New York
THOMAS E. PETRI, Wisconsin
ELLEN O. TAUSCHER, California
HOWARD COBLE, North Carolina
TIM HOLDEN, Pennsylvania
RICHARD H. BAKER, Louisiana
MICHAEL E. CAPUANO, Massachusetts
GARY G. MILLER, California
JULIA CARSON, Indiana
ROBIN HAYES, North Carolina
TIMOTHY H. BISHOP, New York
HENRY E. BROWN, JR., South Carolina
MICHAEL H. MICHAUD, Maine
TIMOTHY V. JOHNSON, Illinois
BRIAN HIGGINS, New York
TODD RUSSELL PLATTS, Pennsylvania
GRACE F. NAPOLITANO, California
JOHN BOOZMAN, Arkansas
MAZIE K. HIRONO, Hawaii
SHELLEY MOORE CAPITO, West Virginia
JASON ALTMIRE, Pennsylvania
JIM GERLACH, Pennsylvania
TIMOTHY J. WALZ, Minnesota
MARIO DIAZ-BALART, Florida
HEATH SHULER, North Carolina
CHARLES W. DENT, Pennsylvania
MICHAEL A ARCURI, New York
TED POE, Texas
CHRISTOPHER P. CARNEY, Pennsylvania
DAVID G. REICHERT, Washington
JERRY MCNERNEY, California
CHARLES W. BOUSTANY, JR., Louisiana
BOB FILNER, California
JEAN SCHMIDT, Ohio
ELIJAH E. CUMMINGS, Maryland
CANDICE S. MILLER, Michigan
BRIAN BAIRD, Washington
THELMA D. DRAKE, Virginia
DANIEL LIPINSKI, Illinois
MARY FALLIN, Oklahoma
DORIS O. MATSUI, California
VERN BUCHANAN, Florida
STEVE COHEN, Tennessee
JOHN L. MICA, Florida
ZACHARY T. SPACE, Ohio
(Ex Officio)
BRUCE L. BRALEY, Iowa, Vice Chair
HARRY E. MITCHELL, Arizona
LAURA A. RICHARDSON, California
JAMES L. OBERSTAR, Minnesota
(Ex Officio)

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CONTENTS

Page

Summary of Subject Matter ....................................................................................

vi

TESTIMONY
Huffer, Mark E., Kansas City Area Transit Authority, General Manager,
Kansas City, MO ..................................................................................................
Poticha, Shelley, Reconnecting America, President and CEO, Oakland, CA .....
Simpson, Hon. James S., Federal Transit Administration, Administrator,
Washington, D.C. .................................................................................................
Townes, Michael, Hampton Roads Transit, Executive Director, Hampton, VA .
Zimmerman, Christopher, Arlington County Board, Board Member, Arlington,
VA ..........................................................................................................................

29
29
4
29
29

PREPARED STATEMENTS SUBMITTED BY MEMBERS OF CONGRESS

Mitchell, Hon. Harry E., of Arizona .......................................................................

42

PREPARED STATEMENTS SUBMITTED BY WITNESSES

Huffer, Mark E. .......................................................................................................
Poticha, Shelley ........................................................................................................
Simpson, Hon. James S. ..........................................................................................
Townes, Michael S. ..................................................................................................
Zimmerman, Christopher ........................................................................................

46
51
60
78
83

SUBMISSIONS FOR THE RECORD

Simpson, Hon. James S., Federal Transit Administration, Administrator,
Washington, D.C.:
Responses to questions from Rep. DeFazio ........................................................
Responses to questions from Rep. Napolitano ...................................................

67
75

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xii

HEARING ON THE FEDERAL TRANSIT ADMINISTRATIONS PROPOSED RULE ON THE NEW

STARTS AND SMALL STARTS PROGRAMS
Wednesday, September 26, 2007

HOUSE OF REPRESENTATIVES
TRANSPORTATION AND INFRASTRUCTURE,
SUBCOMMITTEE ON HIGHWAYS AND TRANSIT,
Washington, DC.
The Subcommittee met, pursuant to call, at 10:00 a.m., in Room
2167, Rayburn House Office Building, the Honorable Peter A.
DeFazio [Chairman of the Subcommittee] presiding.
Mr. DEFAZIO. The Subcommittee will come to order. I want to
thank Members and the witnesses for being here.
On May 10th we held a hearing on New Starts and Small Starts,
and at that time the FTA had not yet issued its proposed rule for
these programs. We had, I thought at the time, a pretty frank exchange of views and the Committee made clear and underlined
what we thought was the legislative intent previously. Unfortunately, since that time we now have the NPRM on New and Small
Starts, and I dont think that, as currently written, it reflects the
concerns that were raised in that hearing. I dont believe it implements the statutory intent, and it has caused tremendous concern
among transit stakeholders around the Country in terms of the
long-term implications, should it be implemented as currently written. I am hopeful that we will see some major changes.
We understand we are in the comment period. The FTA has
scheduled some listening sessions, and hopefully not only the FTA
will be listening, but those others in the Administration who have
been involved in writing this rule will be listening and will be attentive to concerns expressed and perhaps conveyed to them by the
FTA.
I will get into the details of my particular concerns after we have
heard from the Administrator. I appreciate his being here today.
But I really do feel that this is potentially a failed attempt at rulemaking that, as I said earlier, somehow there are new provisions
that were not authorized by Congress that seem to reflect the agenda of other parts of the Department of Transportation and the
Bush Administration, and yet those parts which should reflect the
clear statutory instructions from Congress are still wanting.
So I look forward to discussing this rule with the Administrator
and other witnesses.
I do have a markup on a very, very critical issue to my district
it is also a national issuein another Committee, so at some point
COMMITTEE

ON

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2
I will have to leave, but we will try and move things along as
quickly as we can.
With that I turn to the Ranking Member, Mr. Duncan.
Mr. DUNCAN. Thank you, Mr. Chairman. You have pretty well
adequately stated the situation under the Federal Transit Administrations New Starts Program. Local transit agencies partner with
the FTA to develop and construct subway, light rail, commuter rail,
streetcar, ferry, and bus rapid transit projects to try to solve specific local transportation problems in their communities. New
Starts projects can be brand new starter lines or extensions to existing transit systems. The size, cost, and complexity of these
projects varies widely.
SAFETEA-LU authorized a new Small Starts program within
New Starts for projects that are less than $250 million in total cost
and less than $75 million in New Starts funding. The program is
designed for simpler, smaller projects and the evaluation and rating process is also supposed to be simpler, and we hope will allow
for faster development and construction.
The FTA project evaluation and rating process is established in
law by this Committee. SAFETEA-LU made a number of changes
to the New Starts program and todays hearing will focus on the
Notice of Proposed Rulemaking or, as you have stated, NPRM, that
the FTA has developed to implement those changes. Once this proposed rule is finalizedand it always amazes me how long it takes
to finalize a rule such as thisit will govern New Starts and Small
Starts policy for years to come. It will be at least two years after
the next authorization bill is passed before changes in that law are
implemented in a new final rule, so the final rule that results from
the current NPRM before us will be in place at least through 2011,
and perhaps longer.
I have been impressed and do appreciate the responsiveness and
courtesy which the FTA has shown my staff and my constituents
in Knoxville in working through a transit center land purchase
issue there, but I do wish there was more flexibility in the rules
that the agency is implementing in this case. It seems like there
is very little room for responding to unique circumstances.
This same concern could also be raised regarding the proposed
rule on New Starts and Small Starts we are examining today. The
FTA runs the risk of locking in certain policies too timely in the
rule and not being able to react to new information, including better forecasting tools, ways to capture and reflect economic development around transit stations and along the corridor, and other benefits.
The agency needs to carefully consider all the comments it receives in the upcoming comment period and build in enough flexibility in the New Starts and Small Starts evaluation process to
help move forward good transit projects. It would be a shame and
certainly would not reflect the intent of SAFETEA-LU if this new
rule has the effect of discouraging communities from considering
transit solutions at all.
I thank you, Mr. Chairman, for holding this hearing and I yield
back the balance of my time.
Mr. DEFAZIO. I thank the gentleman.

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I have been notified that Ms. Matsui would like to make a brief
opening statement. I would recognize her at this time.
Ms. MATSUI. Thank you, Mr. Chairman. Thank you for calling
this important hearing. For many of us, our transit systems are the
backbone of our districts. In many cases, our transit systems are
also the blueprint for future growth and economic opportunity in
the communities we represent. In my district, and especially within
the City of Sacramento, we consider most of our future growth and
economic development on our transportation infrastructure, and
specifically our light rail system. Therefore, it is important that our
New Starts and Small Starts programs are responsive to the needs
and demands of our growing communities.
My main concern is why isnt the FTA following the guidelines
and criteria that Congress laid out in SAFETEA-LU. Specifically,
I am concerned that the FTA is too narrowly focused on cost-effectiveness of projects, looking only at the time savings and not the
full range of the project benefits. While this is important and a criteria that should be followed, other criteria such as land use decisions and economic development opportunities must play a greater
role in the FTA decision-making process.
If our light rail systems are truly going to meet the needs of our
communities, they must be built with the anticipation of future regional growth and economic development. Transit should be used
as a tool to encourage our communities to grow smartly and, in
some cases, safely. Sacramento is the most at-risk city in the Country for catastrophic flooding. In addition, the Sacramento region is
one of the fastest growing regions in the Country. We have to make
our land use decisions wisely.
In short, the principles of transit-oriented development must be
a strong consideration in the New Starts approval process. Over
the last decade, public transportations growth rate outpaced population growth and the growth rate of vehicle miles traveling our
Nations highways. It is my hope that, as we move forward with
full implementation of SAFETEA-LU programs, that the full intent
of the legislation that was drafted here in the Committee be followed.
By this I mean that land use and economic development criteria
included among the six evaluation criteria be weighed on equal
footing with other factors, such as cost-effectiveness. Transit-oriented land use and development are demonstrated factors that
truly do make projects more cost-effective in the long run. We need
to capture the dramatic increase of transit ridership across the
Country and marry it with the steady population growth many of
our communities and regions are experiencing. We need a Federal
partner that responds better to these trends.
Combining SAFETEA-LUs revised criteria in the New Starts
FTA decision-making process is an important step in ensuring that
the projects Congress authorizes and ultimately funds may see
evolving demand of our regions. Ultimately, fully integrating transit-oriented development into the New Start decision-making process will be the most cost-effective measure we can take to ensure
that the investment made by the American taxpayers leverage additional private sector investments and create more sustainable,
livable communities.

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I am looking forward to working on these issues during this Congress. Thank you, Mr. Chairman, for calling this hearing. I yield
back.
Mr. DEFAZIO. I thank the gentlelady.
Any other Members have opening statements?
[No response.]
Mr. DEFAZIO. If not, then we will proceed to the honorable witness, Mr. Simpson.
TESTIMONY OF THE HONORABLE JAMES S. SIMPSON, FEDERAL TRANSIT ADMINISTRATION, ADMINISTRATOR, WASHINGTON, DC.

Mr. SIMPSON. Good morning, Chairman DeFazio, Ranking Member Duncan, and Members of this Subcommittee. Thank you for the
opportunity to testify today on the recent NPRM on FTAs New
Starts and Small Starts programs. This proposed rule is intended
to continue and strengthen our successful management of this important program. Our goal for New Starts remains to deliver the
best projects on time, within budget, and that realize the benefits
projected. At the same time, we want to streamline this process so
that decisions are made more quickly and projects are delivered
sooner.
As I testified in May, we believe FTAs management of the New
Starts program fosters highly successful Federal local partnerships
that benefit millions of Americans across the Country on a daily
basis. We believe that this NPRM will continue this record of success. As you know, FTA issued the NPRM on New Starts and
Small Starts on August 3rd, 2007. This was the culmination of a
significant effort to obtain input from key stakeholders, which we
are continuing.
In January 2006, we published a series of questions on New
Starts and an Advance Notice to Proposed Rulemaking on Small
Starts. FTA then provided an opportunity for public involvement by
holding three listening sessions. We received over 70 written comments on the New Starts questions and over 90 written comments
on the Small Starts ANPRM. The NPRM summarizes and responds
to these comments. Continuing our outreach, we are conducting
five outreach meetings. At these sessions, FTA staff will provide
further explanation of our NPRM and related proposed evaluation
measures, and invite public comment to the docket, which closes
this November 1st.
Once the docket closes, we plan on closely examining the comments we have received. Given the stakeholder interest on this
topic, we expect that it will take some time to carefully consider
and prepare a final rule. We expect that the rule will be issued
some time in 2008.
To implement the Small Starts program, the NPRM adds eligibility for non-fixed guideway projects, as in SAFETEA-LU, and defines the kinds of investments needed to qualify. Small Start
project justification includes only cost-effectiveness and two measures of project effectiveness, that is, land use and economic development benefits and mobility. Project justification may be made
based on simplified travel demand forecasts based on year of opening, rather than a complex 20-year forecast. Local financial com-

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5
mitment is assessed based on a plan that demonstrates the capacity to build and operate the project during the first year of operation.
The NPRM proposes that certain simple, low-risk projects, which
by their very nature have sufficient benefits to rate well without
further analyses, can qualify as Very Small Starts and be subject
to a highly simplified project evaluation and rating process. A
project will be required to contain certain features and have a total
project cost of less than $50 million.
The NPRM includes consideration of all the statutory New Starts
project justification criteria. The NPRM reorganizes the justification criteria into cost-effectiveness and several measures of effectiveness, namely, land use and economic development benefits, mobility improvements, and environmental benefits, and clarifies that
operating efficiencies are covered by cost-effectiveness.
The NPRM expands the evaluation of economic development in
a new combined measure of land use and economic development
benefits. We continue to believe that it is extremely difficult to distinguish economic development benefits from land use benefits.
However, the NPRM provides an opportunity for input on how we
might do so and how we might implement improved measures of
project merit that would include the land use and economic development benefits more directly.
The NPRM includes evaluation of the congestion reduction potential of the proposed investment in the assessment of mobility benefits. Further, it proposes to consider the relationship of the project
to road pricing strategies as another factor.
Finally, the NPRM asks for inputs on methods by which FTA
could include the currently unmeasured highway system user benefits in calculating the cost-effectiveness of the proposed project.
The NPRM proposes to make permanent our current policy of
recommending for funding only those projects that rate at least medium on cost-effectiveness. First, this is the only measure that compares a projects benefits to its costs. Second, the measure of effectiveness we use, user benefits, is an objective and quantifiable metric. Third, other benefits such as improved accessibility and mobility, the propensity for increase in property values, and the likelihood that highway users will switch to transit, reducing demand
for highway travel, are directly related to user benefits. Finally, a
project with a high rating on cost-effectiveness almost always has
high ratings on other factors such as mobility improvements and
environmental benefits.
Chairman DeFazio, Ranking Member Duncan and Members of
this Subcommittee, FTA is committed to the New Starts and Small
Starts programs. We believe that the NPRM we have issued provides a good basis on which to make continued improvements to
the management of this important program. We remain committed
to streamlining project delivery, while providing strong project
management oversight to bring good projects in on time and within
budget. We look forward to working with Congress on these and
other issues facing our Nations public transportation systems.
I want to thank you for the opportunity to be here today, and I
am happy to respond to your questions.
Mr. DEFAZIO. Thank you, Mr. Administrator.

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Ranking Member Mica had another commitment, came in late,
and has an opening statement.
Mr. Mica.
Mr. MICA. Thank you. Thank you for yielding, too, and also for
holding this hearing, Mr. DeFazio and Mr. Duncan. I think this is
very important. Since we havent really addressed New Starts with
the Administration, I wanted to weigh in a little bit on a couple
of my concerns and also from a policy standpoint.
One of the things that I think is essential, we are all trying to
find ways to deal with congestion and get people out of traffic and
into mass transit and other environmentally positive modes of
transport. One of the frustrations I haveand I am pleased to see
you here this morning, Mr. Simpsonis just the sheer amount of
time it takes to get into the queue, so to speak, with the New
Starts program. And I think part of the problem I have identified
is sometimes Congress, and I would ask this question: Have we set
too many requirements?
I dont have a question, but one of the things I would like you
to do to respond to me and also to the Committee would be to provide us with any of your specific recommendations on how could
speed this process up. I think we are going to hear from Norfolk
and I will ask the question about their light rail, and I think from
the entry to P&E it is eight years, I was told.
I have been involved, as you know, with a commuter rail on an
existing rail right-of-way. We first proposed this in 1989. Of course,
communities and partners have to make a decision, and they did
that, but I know we have been involved in this for at least three
years, answering some questions that are sort of as plain as the
nose on somebodys face. We have turned the consulting requirements or the requirements to do New Starts into a cottage industry
that is very costly and time consuming.
So I want to know how we can speed up the process. Speeding
it up can also save us time and money.
The other thing, too, is I cant tell you, having been involved in
these not just in my district with commuter rail, but around the
Country, the players change. The local players change and the politics, and some of the politics, of course, evolve around these questions and they get pretty testy. So the longer that takes, the more
players we deal with and the political challenges become even
greater.
So I compliment you on what you are doing. You have to play
by the rules that we in Congress set, but anything you can recommend or anything you can come up with that can condense that
period of time to get these New Starts moving.
Then, looking at exceptions for projects like commuter rail on existing rail lines, this isnt exactly rocket science. For example,
through my communities, I have Amtrak already with a franchise.
They already make these commuter stops. They could probably increase their traffic without all of these studies and requirements,
but folks are a little bit reluctant to give Amtrak any more responsibility based on their performance and some of the constraints
that they have to operate under.
So those are just my comments this morning. I look forward to
working with you. I know Mr. DeFazio and Mr. Duncan are also

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interest in seeing how we can help communities, States, and localities that move these new projects forward.
Thank you, and I yield back.
Mr. DEFAZIO. Thank you. I thank the Ranking Member for those
comments.
We will now proceed to questions for the Administrator.
At issue in the earlier hearing, in May, and I believe still today,
is that I feel you have not delivered on the statutory direction, I
believe, from Congress regarding economic development and land
use. They have been lumped into one criteria, and I have a couple
problems with it. One is that it is lumped into a criteria which
scores 20 percent, which, given the statutory direction, I believe
does not adequately address the direction from Congress to act in
these areas and to emphasize projects that would provide benefits
in those areas.
Secondly, as I understand the wayI mean, we did have testimony later, after you appeared in May, from several experts who
had models and said there is no big deal or problem in predicting
or forecasting economic benefits and quantifying them; that the
work has been done, but somehow the FTA cant find that work
and implement it. It seems that what you are attempting to do is
look at the impacts of a limited facility on the regional economy,
as opposed to just looking at what the local transit agencies would
look at, which is the economic development based on the corridor
and the station area economic development.
I think that is part of the problem why FTA cant qualify; they
are saying, well, we want to look at the impact of this line serving
this segment, this neighborhood, and what the impact would be on
the regional economy kind of gets lost. And we are going to have
testimony a little later representing a county in Virginia about how
they dont have any trouble quantifying exactly what is going to
happen when they do the streetcar line in terms of the more intense development that is going to occur and the economic benefits
that are going to flow from that.
So do you think this this part of the problem, Mr. Administrator,
why you cant get to economic development, that you are off chasing the regional benefit, when I believe the models that have been
developed, and would be more practical since these are relatively
small projects, to measure the benefits on the corridor and the stations?
Mr. SIMPSON. Let me answer that two ways. First, let me tell you
what FTA is doing since the last hearing in terms of economic development. Then I can give you my thoughts generally on the
measurement of economic development.
First, we have had a two-phased project, one started over a year
ago, and I mentioned it at my last hearing, where we did a study,
and the effort included an initial study to develop a methodology
to forecast changes in economic development activity that result
from transit capital investment projects. The FTA developed and
tested two potential approaches. One was a regional economic
model to forecast changes in jobs and income, and, two, to develop
a method to forecast station area development that would result
from transit investments, which I think is what you are referring
to, Mr. Chairman.

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When we looked at those, we found that the first one, the regional economic modeling approach, was rejected due to the high
cost and complexity of implementing these models, as well as concern about the erratic results observed in FTAs test cases. I said
it in my last hearing, that cost-effectiveness gives everybody a lot
of grief. These models that we looked at would be just as challenging.
Mr. DEFAZIO. Right. So why dont we just discard the regional
approach and focus on the second which you mentioned?
Mr. SIMPSON. Im going to get to that.
Mr. DEFAZIO. All right.
Mr. SIMPSON. The station area forecasting method was also
somewhat unsatisfactory in that the impact of the transit investment on development patterns was not significant in FTAs test
cases.
Now, we didnt stop there. There is more. We have a phase two
study that seeks to make additional progress in developing a method to evaluate the economic development impacts of capital transit
investments. The first thing we are doing, which I mentioned to
you previously, is we are convening a panel of top experts on economic development impacts which are well known to the industry
and are leaders in the field. They are going to review FTAs results
to date and try to come up with a program for us. They are going
to also assist us in consulting and developing a program that can
show us which methods, if we can achieve them, are likely to succeed. The panel is also going to develop a methodology and research program based on panel recommendations, and so forth and
so on.
But the bottom line is that, to date, we have not been able to find
anything that we can use on a cross-cutting basis to measure economic development. And just as a sidebar, I have been reading
Alan Greenspans book on the age of turbulence and he talks about
economic forecasting, and he basically says how complex the world
really is, and when you try to measure something, it is just not
that easy. And I think that, if you will allow me to steal a page
from his book, it is pretty much the same case here.
But what we have found consistently throughout the transit program at FTA is that when we measure cost-effectiveness, which I
know gives a lot of folks a lot of grief, there is a direct correlation
between the cost-effectiveness measure and economic development
and mobility and all the other factors. They are inextricably linked
and we just cant uncouple them. That is why, when we now have
decided to put land use and economic development together, we are
trying to do a couple things: we are trying to show transparency
and, as you said at your last hearing, we have this mysterious
black box that we go back to the shop and try to churn out these
cost-justifiable projects. We are trying to be transparent and to let
everybody know clearly what we are thinking and how we are
thinking, and we are making our best attempt at that.
With respect to economic development and land use, we believe
that you cant have economic development unless you have land
use, good land use patterns and policies. So it is a no-start if you
dont have that in place. So if we rate a project with really effective
land use and then give another measure of economic development,

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you could be double-counting, number one. Number two, even if
you do have really good land use, it is not enough to make the case
that you are going to have that economic development; there are
other externalities that are so great, includingwe have had a runup in real estate over the last 17 years. I dont care where you travel around the city, every place that I have traveled has seen economic development and the redevelopment of cities and
warehousing districts that have become a great mixed use development, and people seem to be moving back to the city. But there are
other externalities like interest rates, like jobs, and all those other
things that are really hard to try to put into a formula and put into
our so-called black box and churn out a metric that is cross-cutting
throughout the whole Country and that is meaningful.
The second thing with economic forecasting is we have got our
transportation model, as I spoke about, and some of this economic
forecasting is almost a second level of economic forecasting. So I
think that, in a certain way, it explains what our predicament is
here.
Mr. DEFAZIO. Right. Well, if we can come back to earth for a
minute.
Mr. SIMPSON. Okay.
Mr. DEFAZIO. I think you can look at projects that have been
completed and, yes, you do have land use, which is a theoretical
underpinning, but land use potential is only realized in certain instances; there is a lot of potential that isnt realized. So I wouldnt
say just having that and then counting the actual economic benefits and/or more intense development that resulted from the construction of the transit project are the same thing at all.
I mean, land use provides the potential, but the potential often
is not realized until there is a project. And if you just look at the
nodes that have developed just right over here in Virginia and
around the D.C. area, the intense development has taken place and
you can measure within a certain distance of each of the transit
stations the values that have occurred. You can do so, similarly, in
Portland, Oregon, where they have put a streetcar. You can see
where, along that line, they have the same zoning on one side of
the river and the other, but the more intense development has been
realized along the streetcar line because that became a magnet for
the development.
So I have got to disagree, and I think that we just gave direction
that doesnt require consulting with Alan Greenspan or these other
exotic metrics, but just the reality of will economic development follow this project and will there be value created. I think that is a
fairly simple thing, I believe, to quantify. Having studied economics, I know it is not a science, so lets discard the scientific stuff
and go to observational reality and direction from Congress, which
is we want economic development and we dont want it to be part
of a criteria which is only 20 percent and which is totally trumped
by the black box of cost-effectiveness.
And then going to cost-effectiveness, part of that goes to another
concern, which is trips not taken. Again, we dont seem to be putting any value on avoiding automobile use and/or commuting. I just
had the Chairman out to ride a tram in Portland, and you were on
that same tram. It has now been operational. They say they have

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had a million riders in less than a year on the tram, and what they
are finding is at the base of that tram, which is also served by a
streetcar line, a lot of people who work at Oregon Health Sciences
University are relocating there.
So they are either abandoning their cars or only using their cars
infrequently. But there wouldnt be any credit for that, it is a trip
not taken. They are living on a transit line, they are living on a
tram. You are not involving the tram. But the point is we are missing a lot of the benefits here.
And then we also wanted to have environmental criteria, which
go to trips not taken, congestion, lack of pollution, all those things,
and now you have brought in this new criteria. So this is going to
be a two-part question. One, why cant we measure trips not taken
and why isnt that a benefit, because I think it is an avoided cost?
Secondly, how is it that we would penalize a transit agency
which, in most jurisdictions, has no control, none whatsoever, over
policy relating to roads, bridges, and highways, if their local jurisdiction, which they dont control, doesnt impose tolling and congestion pricing over here, then you are going to penalize the transit
project which is proposed over here to mitigate congestion with
trips not taken? I mean, you are putting the transit agency in a
bit of a difficult position here.
Mr. SIMPSON. Mr. Chairman, we are in agreement with you that
we should measure the trip not taken. We asked the question in
the NPRM, and just to try to stay on earth, the problem that we
have experienced with the trip not taken, it is sort of like the second order of magnitude or it is the forecast on the forecast. In other
words, we are trying to forecast a certain development and a certain economic development, so that is a forecast, so we have got
this one forecast.
Now, off that forecast, we are going to try to forecast again behavior patterns, travel patterns, where people wont need to use
their automobiles. So it is the second order of magnitude in a forecast, so the
Mr. DEFAZIO. Maybe we ought to just count the number of people
that use the transit.
Mr. SIMPSON. Well, we should.
Mr. DEFAZIO. Right.
Mr. SIMPSON. We do. I think we do. But this trip not taken is
a very difficult
Mr. DEFAZIO. And distribute a survey to them and say before you
moved here, how did you get to work.
Mr. SIMPSON. Right. You know, I understand the trip not taken,
having lived in an urban environment, so I understand it.
Mr. DEFAZIO. Right.
Mr. SIMPSON. But let me just say again that we are asking that
question. We do believe that it should be counted. And I know that
there are one or two models out there that are counting the trip
not taken, or proposing to count the trip not taken. Once again,
when we put it into a national program, we have to make sure that
we have a product that is not usable in one county and not used
in the rest of the Country.
Mr. DEFAZIO. Okay, but then how about my second part of the
question? Transit agencies often do not control other modes of

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transportation and/or the policies that relate to them. So why
should a transit agency be penalized in applying if their local jurisdiction has not adopted congestion pricing?
Mr. SIMPSON. The proposal is not to penalize anybody.
Mr. DEFAZIO. Well, I understood the first proposal was just to
give them extra points. As I understand the NPRM, you could get
demerit points for not having that, in addition to getting extra
points.
Mr. SIMPSON. Not to my knowledge, but could you hold on one
second?
Mr. DEFAZIO. Yes.
Mr. SIMPSON. It is only a matter of boosting, Mr. Chairman. It
would only help, it wouldnt hinder. And it also
Mr. DEFAZIO. So you are going to filter, but you are going to filterI mean, it seems like pretty broad language. The first proposal
was we are going to take something that wasnt statutorily authorized by Congress
Mr. SIMPSON. Right.
Mr. DEFAZIO.that is an obsession of this Administration, particularly a few ideologues from right-wing think tanks who have
positions of power, that relate to theories of market and congestion
pricing, and we are going to use it anywhere and everywhere we
can. So now we have added it on to transit. We had this discussion
last time, so I am not going to totally revisit that in terms of
whether or not you are discouraging transit at this point with this.
So you are just saying this so-called filter is essentially the same
thing you proposed before, which is if an agency, which you dont
control, in your vicinity adopts congestion pricing, you will get
extra points on your transit project even though you had nothing
to do with it.
Mr. SIMPSON. That is correct. But most planning is not
[Laughter.]
Mr. SIMPSON. Well, wait a minute, now, Mr. Chairman. Most
planning is not done in a vacuum. Typically, you have got the
whole MPO and the whole planning process. So we are saying if
an area were to adopt a congestion pricing strategy that would help
transit, because now you are getting more vehicles off the road and
you have more people riding transit, we would look at things like,
in the mobility factor, fewer vehicle miles traveled
Mr. DEFAZIO. But when we are talking about New Starts and
Small Starts, we are not talking aboutmany projects are not deep
into suburban areas.
Mr. SIMPSON. Right.
Mr. DEFAZIO. So when you include thatI mean, for the inner
city folks, I guess we would have to be talking about cordon pricing
and saying if you want to use your car today, it is going to cost
you $15 or $20. We are going to be like London. Of course, they
have slightly different land use patterns in Europe. Again, the
transit agency doesnt control that, and it is beyond me why that
should be a factor.
I can see, in some limited instances, when you are dealing with
light rail versus, say, streetcar or true Small Starts, something
that is an extensive system which serves suburban areas, that you
might get some extra points with the idea that you are going to

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somehow drive people onto that and they are going to utilize it
more. I believe if you do it right and you make it convenient, they
will use it, and I dont believe that we need to penalize people to
make them do it, and the Chairman of the full Committee shares
my concern about this.
Mr. SIMPSON. Mr. Chairman, I dont want to take up the Committees valuable time to discuss this, but from everything that I
know and speaking to the folks at FTA, we know of no area where
anybody would be penalized as a result of not implementing a congestion strategy
Mr. DEFAZIO. Right. But again, the point is that transit agencies
dont control these other policies. Transit agencies we want to be
run efficiently, we want them to bring in projects on budget or
under budget, we want them to run efficiently, and we want them
to serve the general public. None of that, again, externalities that
might or might not drive customers toward them, that are beyond
their control, I dont believe, in most instances, should be scored.
Mr. SIMPSON. This is an NPRM and the point is well taken. But
if I could just continue for the record for one second.
Mr. DEFAZIO. Sure. I am well over my time.
Mr. SIMPSON. With respect to congestion, as you know, and we
have said it before and it is mentioned throughout the statute, the
Department believes, first of all, that it is one DOT, and we are
not looking at highway versus transit. As in the MPO planning
process, we are trying to look at transportation solutions for a corridor, and it could be a mixture of transit and highway projects.
You know, since SAFETEA-LU was written, which was probably
five or six years ago, we have got a national crisis that is on the
front page every day on congestion, and the Department is trying
to take a proactive stance to try to solve the problem that perhaps
wasnt thought about when SAFETEA-LU was written.
Mr. DEFAZIO. Well, I beg to differ. I think it was a major consideration when SAFETEA-LU was written. This Committee attempted to have about another $70 billion or $80 billion to invest
over the term of the bill, which the White House fought tooth and
nail, and in the end we got a bill that wasnt adequate in terms
of investment, and now they are trying to make up for that by saying, well, we will just use market forces, and I have just got to disagree with this cockamamie theory.
Thank you. I am going to turn now to the Ranking Member.
Mr. DUNCAN. Well, thank you, Mr. Chairman.
Mr. Administrator, you know, the problem that I see is this. I
have great respect for Mr. Greenspan and I agree with most of
what he says on things, and I understand your quote that he said
the world is a lot more complicated than people realize. On the
other hand, a lot of people feel that the government, and particularly the Federal Government, makes things a lot more complicated
than they really need to be.
So, in SAFETEA-LU we had these laws trying to come up with
some sort of environmental streamlining to speed up some of these
projects because people on both sides of the aisle agreed that all
of these projects were taking far too long. Where there is really a
desire to move fast, we can do so. We showed that on the bridge

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out in Minneapolis. I mean, we passed a $250 million bill within
just a few days of that happening.
We always hear, and it gets sort of old to me to say that we are
in a global marketplace now or we have to compete globally, and
yet we see all these other countries that are so dynamic economically moving really fast on major projects, major highway projects,
major aviation projects. I chaired the Aviation Subcommittee for
six years and I will never forget the main runway in Atlanta. It
took 14 years from conception to completion. It only took 99 days
of actual construction, and it was primarily due to all the environmental rules and regulations and red tape. Certainly, we dont
want to do to the environment what they are doing in some of
these places like China and other places, but we have to do better.
We have got to have a better balance in there because we have got
to speed up these projects. A few months ago we had testimony in
here about a highway project they have been working on in California since, I think, 1990, 17 years, and it was only 12 miles.
So what I am getting at through all this is what do you think
your proposed rule will do to contribute to faster decision-making
and project development, particularly in regard to the New Starts,
the bigger programs?
Mr. SIMPSON. Your question really gets to the question or statement, rather, that Congressman Mica made earlier, so maybe I can
address it in that context. I mean, the environmental is one piece
of it, but with a lot of these projectsI know it varies on the complexity. We talk about the length to bring a project from the planning cycle to the revenue date or the date that a project opens
there are a whole bunch of reasons for them and they dont all
wind up at the doorstep of the Federal Government.
We find that most of the projectsand I think you asked that
question last time, Congressman, local commitment, rather than
cost-effectiveness, is the reason why many projects fail and dont
proceed through fruition, and that holds true for the delay in
projects. We find that in many times, as Congressman Mica was
so eloquent in explaining it, there are changes in political parties,
there are changes in transportation officials, and what was once a
priority may not be a priority or other things happen, and you
thought you had local commitment and now you no longer have
commitment. So that is one reason why.
The other thing is transportation planning. Sometimes, when we
plan these projectsand we have a project very close to Washington, D.C. that is like thatthat the scope gets changed and people think about, midstream, well, maybe we are not going to have
an aerial alignment, maybe we should do a tunnel, and that is perfectly within the local jurisdiction. That also slows up projects.
Our NEPA process, we are trying to do the best that we can with
respect to NEPA and with respect to the processes that go on in
FTA. We have commissioned Deloitte and we have implemented
many of the changes, and I wont take the Committees time to tell
you them now, but I would be more than happy to send them to
you for the record. Then we have also improved the product at FTA
over the years. You know, there was a time, maybe 10 or 12 years
ago, where not our forecasting, but the grant recipients forecasts
on ridership were woefully inadequate and low, and their costs

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were a lot lower than what the actual costs would be. Now, you
know what the rationale is for that: we need to get projects funded,
so lets keep the ridership numbers as optimistic as we can and the
costs as low as possible.
So FTA, with the help of Congress, clamped down on that and
we are moving forward with a Contractor Performance Assessment
Report. We started our own risk analysis to trywe do a lot, but
basically what I am saying is we are trying to keep projects on
time and on budget because we would rather be here talking about
this than why the project blew the estimate by 50 percent. And we
are trying to streamline the process as much as we can without
jeopardizing the integrity of the program. It is a multifaceted approach and the project time line did go from 3.7 years to 4.9 years,
where it is at now,I guess it has been over the last 10 years
but then again we are handling like $22 billion worth of projects
within 99.5 percent of construction costs, which is unheard of. We
dont have that anywhere, and I think it is a testament to the risk
program. So we are working what we can, it is just that there are
so many partners involvedbetween the local governments, the
Federal Government, the funding partnersthat it is not as easy
as that when you build these major capital infrastructure projects.
And with respect to the rest of the world, I only know that we
have rules and regulations that protect everybody, and I know
other countries sometimes dont have the same environmental
guidelines or they dont need to get consensus from the community.
We have all that public involvement.
Mr. DUNCAN. Well, I have certainly seen and read about what
you are saying, you know, one mayor will start a project and be
real enthusiastic about it, and the next mayor is not quite so enthusiastic or whatever. But I also have heard through so many
Subcommittee hearings on several different Subcommittees in this
Committee, I have heard local officials, I have heard academic experts, I have heard private business, you know, the contractors and
so forth, say that all these projects that we deal with in this Committeehighways, water projects, aviation projects, the whole kit
and caboodlethat, on average, these things take about three
times as long and tossed about three times as much as they should.
If we really had the desire to speed some of these things up, if we
all joined together and made that our main
What do you think is the most time-consuming process for New
Starts projects sponsors in fulfilling the evaluation requirements?
Mr. SIMPSON. Well, it depends on the project. I mean, a lot of it
is we have got some projects where they havent done all the environmental protocols correctly or their forecasting is notyou know,
we have seen projects before and we will have projects come in
where the forecasting doesnt look right, where you will see forecasting on the date when the project is scheduled to be completed
and 10 years later you have seenthis is just an exampleor 100
percent increase in ridership, things that are out of the norm. So
we see less of that today, but those are the kinds of things that we
have to put the paperwork back to the grant receiver and say, you
know, this really doesnt look right, you need to look at your travel
models and you need to look at this and you need to look at that.

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So it is hard to just say any one thing, it is a whole host of things,
and it is a cumbersome process.
Mr. DUNCAN. Well, we have other Members here. I dont want to
take up too much time, but let me just ask one last question. At
our May hearing that the Chairman mentioned, the GAO testified
that there is less than half the number of New Starts projects in
the pipeline in fiscal year 2008 than there was in 2001. Is that
from State and Federal funding? What is the situation?
Mr. SIMPSON. No. I think it was we had a lower bar. In other
words, sort of like if you just decidedI like to use the SAT as an
example for the New Starts program, with the SAT score being
cost-effectiveness. It is almost like if we throw away the SAT, let
everybody come in to preliminary engineering, lets bring everybody
in, which was happening for a long while because of political pressures and other and lower standards. So we found out, with our
limited assets of full-time equivalents, that we had our staff at
FTA working on a multitude of projects, probably half of which
arent going to make it past PE.
So I think you brought this up last time, so I do have some extra
data. From 1999 to 2005, which is what you are talking about, we
found that 56 percent of the projects are out of the process because
of a lack of local commitment. So there is a lack of local commitment, which seems to trump everything else, where projects fall
out, number one. Number two, we have certain standards now, and
if you would like to, I can articulate them. Certain things have to
happen before we allow a project into preliminary engineering, because once we allow the project in preliminary engineering, that is
when the resources of the Federal Government or local government, they start spending money and putting a lot of resources into
a project. We want to make sure that projects now that come into
preliminary engineering have a really good shot of being funded.
The short answer is we didnt do that in the past.
Mr. DUNCAN. All right. Thank you very much.
Mr. DEFAZIO. Okay, we will turn to Members in the order in
which they arrived for questions. Ms. Hirono would be first on the
Democratic side.
Ms. HIRONO. I know that we are, today, addressing the proposed
rule, however, on July 20th, 2007, the FTA issued the New Starts
and Small Starts evaluation and rating process, which I think are
the guidelines that FTA intends to use, and pretty much this rating process issuance incorporates many of the factors in the proposed rule. So what is the intention of the rule if you already have
guidelines that incorporate these rules and you intend to use those
guidelines, I assume, regardless of whether the proposed rules go
into effect or not?
Mr. SIMPSON. Congress asked us to be more transparent in what
we do and to look at economic development and other factors, and
at the last hearing we heard from some Members that we werent
really paying enough attention to environmental benefits and the
like, so, as the program changes, we are trying to change along
with the requirements that Congress has enacted. So we are putting this proposed rule out to get comment.
Ms. HIRONO. My understanding is that this July 20th issuance
already incorporates the weight to be given to the cost benefit as-

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pects of New Starts and Small Starts, so it seems as though you
are already going in that direction under these guidelines that
have already been issued, so I need clarification from you.
Mr. SIMPSON. Yes. Particularly the Small Starts was a new program and we didnt have the rule out. We put out what we thought
would beI guess what we thought might work in the short run,
until we had a final rule. So there was a certain logic that went
along with that, and I think you will see that that logic follows
what the proposed rule is now, particularly for the Small Starts
program. Once again, this is for comment, so we are expecting a
lot of comment from all the stakeholders before we initiate a final
rule.
Ms. HIRONO. In other words, then, just so I am very clear on this,
then, the final rule will trump or will supersede whatever is in
your July 20th, 2007?
Mr. SIMPSON. Yes. Right now we have guidance. We have guidance right now.
Ms. HIRONO. Okay.
Mr. SIMPSON. We needed a place to start, a placeholder, and we
are moving towards the final rule, and hopefully that final rule will
come out sometime in 2008.
Ms. HIRONO. I have one more question. Has any New Starts
project ever received a high financial rating, as opposed to the medium rating?
Mr. SIMPSON. Yes. Yes. Quite a few.
Ms. HIRONO. Could you provide the Committee with a list of
those New Starts that achieved a high financial rating?
Mr. SIMPSON. Yes. We will do that, absolutely.
Ms. HIRONO. Thank you.
Thank you, Mr. Chairman.
Mr. DEFAZIO. That was of interest to me also. We would like to
see a list of those that have achieved a high rating.
Mr. SIMPSON. Matter of fact, yours received a high, your BRT
project in your town received a high rating.
Mr. DEFAZIO. New Starts and Small Starts.
Mr. SIMPSON. New Starts as well.
Mr. DEFAZIO. Okay. Thank you.
Ms. Hirono, are you
Ms. HIRONO. I yield back my time. Thank you, Mr. Chairman.
Mr. DEFAZIO. Okay.
Mr. COBLE. Thank you, Mr. Chairman.
Mr. Simpson, the gentleman from Tennessee put a question to
you that concerns me, and that is the apparent lack of increase in
the starts that are in the pipeline, and I know you responded to
that, but am I correct in concluding that maybe one of the reasons
for this is that it is so difficult that the local authorities just cant
get their hands around it?
Mr. SIMPSON. No, I wouldnt call it that. It is difficult, but we
give a tremendous amount of technical assistance in outreach to
anybody that is interested in a New Starts. It is just that there are
certain milestones that you need to achieve in order to get into the
preliminary engineering stages where basically the Federal Government starts to follow the projects through to construction. As I
said, years ago the entry was very simple. If you had a project,

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pretty much you could get it into the preliminary engineering, and
we found that there was a high failure rate.
So we figured that sort of prior planning prevents poor performance. Lets try to do as much planning and lets try to do as much
work so that if you do get into preliminary engineering, because
theres a lot at stake once its in PE, theres an expectation that
you are going to have a project, so lets not disappoint communities
and the like, so lets work with folks. And once theyre in PE, many
times when projects get into this preliminary engineering stage, we
work with projects that may not be viable and we helpbecause
we have been building projects all over the Country and this may
be a communitys first project, so there are many projects that
come to us.
Once they meet the PE milestone, we work with them just like
partners, investment bankers, and we tell them, you know, maybe
your project is too long, or you need fewer stations or you need
more stations, or have you thought about transit-oriented development and the like, have you thought about alternative forms of financing. So we really work very hard with thewe take ownership
of the project, basically. We work very hard with the grant recipients, and it is very timely. So whatever shortfalls the local community or the transit agency may lack, we really try to help them and
we give them proper guidance. It is really in that way. I say that
seriously. We take ownership of the project.
Mr. COBLE. Mr. Simpson, there have been concerns voiced about
the proposed rules expanded eligibility to allow New Starts funds
to be used to build high occupancy toll lanes, popularly referred to
as HOT lanes, in addition to the high occupancy vehicle, HOV,
lanes, which are currently allowed. What is the FTAs statutory authority to amend this regulatory definition, and will this change
make the treatment of HOT lanes consistent under highway and
transit law?
Mr. SIMPSON. We are really trying to help transit projects as
much as we can, and what we found over time, you dont see bus
lanes being constructed any longer, and it is our belief that one of
the reasons is that cost of a bus laneI know from my personal
experience in the northeast, particularly in my old community in
Staten Island, we have exclusive bus lanes that travel probably
about 15 miles from one of the suburbs to the center of Manhattan
or to the tunnels that connect the highway to Manhattan, and
those bus lanes typically run at about 30 to 40 percent of capacity.
So on existing bus lanes that transit authorities, in this case, the
City of New York, they have a bus lane where they are running
buses, great express bus service, and they have only got 30 to 40
percent of capacity.
So it was our thinking, to try to be creative and look for alternative financing methods and to help transit, that the use of an
HOT to make a bus lane or another lane, an HOT lane, as long as
you maintain that flow of traffic so that the buses are not bogged
down, that the HOT lane or the pricing lane, if you will, is incidental to the main purpose of the bus project, but it is also subsidizing the bus project.
So if you can envision a bus lane that is maybe 30 to 40 percent
of capacity, now you put cars on the lane up to the point where you

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have real-time pricing, up to the point so that you dont bog down
that lane and it meets the requirement of at least 5 miles of the
speed limit, all those cars that are on the lane that are getting that
what we call free flow, there is a lot of revenue to be picked up off
of those people that feel that time is money. That actually goes to
subsidize transit projects. So the person who is sitting in the bus,
looking out the window of the bus as it travels down the exclusive
HOT lane, the cars that are on that lane are subsidizing the fare
box to promote more transit.
It is very similar to what New York City Transit does when they
build a tunnel and they put telephone wires and cable and a whole
host of things in that tunnel. Now, that is an incidental purpose;
they didnt build that subway tunnelthey built the subway tunnel
to drive the train through it, but they are picking up huge revenues to help offset the fare box by allowing these incidental purposes or uses to the tunnel.
So thats what the thinking was there. It is a new innovative way
of thinking to help alleviate traffic congestion, because now, whatever cars that you take off those other free lanes, you are helping
everybody there. So you are using unused capacity, and we believe
that since that is not the main purpose of the HOT lane, it is incidental, it is an ancillary purpose, that we are perfectly within the
statutory authority to do that.
Mr. DUNCAN. Well, I think, Mr. Chairman, any time we can take
action to improve congestion, which inevitably negatively impacts
productivity, results in additional consumption of gasoline, I am endorsing that. Thank you, Mr. Chairman.
Mr. DEFAZIO. Mr. Simpson, if you could, since you gave a long
explanation, but at the very end I thought you sort of brushed over
the question. Again, he started the question with what do you believe is your explicit statutory authority. Could you just get back
to that? It sort of was incidental at the end. I think what you said
was because its incidental, or something, that somehow you found
it was statutory.
Mr. SIMPSON. I think it is best if I give you another example.
Mr. DEFAZIO. No, I dont want examples. Just what statute are
you referring back to? I mean, what is the expressed statutory authority to use these funds for HOT lanes? Because you could argue
the other side of the argument, which is the Federal funds that go
to construct the HOT lanes are subsidizing the non-transit use of
that lane, at least initially, because later, perhaps, you will realize
the potential of those additional revenues and maybe you will pay
back the additional investment was made. So what is the statutory
authority?
Mr. SIMPSON. Well, first, our intent is that whatever Federal dollars from the FTA program are utilized, it is for the transit portion
of the project only. That is what our intent is. Secondly, can I get
back to you for the record fully with where in our statute, because
I dont have that?
Mr. DEFAZIO. Yes, we would like that. Thank you.
Mr. SIMPSON. Okay, thank you.
Mr. DEFAZIO. Mr. Mitchell. He left also? Okay, then we go to Mr.
Bishop from New York.
Mr. BISHOP. Thank you, Mr. Chairman.

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I want to just follow up on the question that you were just asking. In the Notice of Proposed Rulemaking, you also create a new
category called Very Small Starts. So my first question is what is
the explicit statutory authority under which you are creating that
category.
Mr. SIMPSON. Well, I dont know that we have an explicit statutory authority, but, once again, we have a lot of really good thinkers at FTA that do a lot of transportation modeling, and we have
got economists. We know that when you build a transit project, the
complexity of forecasting and all those other things increases exponentially the larger the project is. So when you start to get to like
your project on the Long Island Railroad, the East Side Access
project, as these projects start to get complex, the forecasting, all
those things and all those requirements that you need to measure
in order to determine whether you are going to rate the project a
pass or a fail, get a lot harder.
We just happen to know, from working with all of these transportation models, that if you have at least 3,000 riders a day,and
there are two or three other requirementsthat the project is no
more than a $3 million a mile, and a couple of other things, that
it automatically would meet our requirements because we have just
seen that over the pipeline. So it is sort of like a preapproval, if
you will.
Mr. BISHOP. Let me just stay on that for a second. The $3 million
per mile, in response to a question from Mr. Coble, you just indicated that one of the goals was to help transit projects as much as
you could. By creating or imposing this $3 million per mile limit
on Very Small Starts, does that not eliminate certain types of transit projects like streetcars?
Mr. SIMPSON. No, not at all, no. See, what we are saying isI
left out the most important thing. The project has to be less than
$50 million. So if you happen to have a project that is less than
$50 million, it costs less than $3 million a mile to implement, and
it has got 3,000 riders a day, it is basically a preapproval. We know
that that will meet the requirements because it is really small in
nature, the complexity is not there, and we just happen to know,
in studying these projects and funding projects before we had the
Small Starts program, even, or these exempt projects, that these
projects meet the criteria.
You know, it is a proposal. If the desire of Congress is not for
us to label that or have that, we will note that in the comment here
today. But it is certainly not to exclude any project, because there
is the regular, you have got the Small Starts program and you
have got the New Starts program as well. So there is no limitation
on anything, it is just that, hey, by the way, community, if you
happen to have a project that meets that litmus test, it looks good.
Mr. BISHOP. And, again, not to be difficult, but in response, I believe, to a question from Ms. Hirono, you indicated that one of the
goals here was transparency, improved transparency. Are you not
at odds with that goal by virtue of layering all these both new designations and new requirements onto the NPRM?
Mr. SIMPSON. I kind of think we are just trying to be customerfocused. It is like if you go into a bank and buy a mortgage, you
want a fixed rate, an adjustable rate, or a one-year ARM. It is just

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another option for people that may have a small project that they
need to fund quickly. So I dont really know how to respond to that
other than, when we get the comment, if the transit industry or the
stakeholders dont like it, this is a Notice of Proposed Rulemaking.
Mr. BISHOP. Thank you very much.
Thank you, Mr. Chairman.
Mr. DEFAZIO. If I could, just following up on that. I would agree
with the gentleman from New York. I believe that the $3 million
per mile yardstick would exclude any streetcar projectand that is
the consensus in the transit community across Americafrom the
Very Small Starts program. We are not aware of any that have
been built for less than that. In fact, it would exclude many BRT
projects that have enhanced guideways and those sorts of things.
So, pretty much, I think we are just going down tomaybe this
would help the HOT lane issue or something. I dont know what
the objective is here, but you are excluding streetcars, as far as I
am aware. If you have any evidence of any streetcar project that
came in and has applied for Very Small Starts under $3 million a
mile
Mr. SIMPSON. The only streetcar project that we have right now
is a project that is out on the West Coast at about $140 million or
$150 million.
Mr. DEFAZIO. Right. And people arent applying because they
just know they cant meet the criteria.
Mr. SIMPSON. I dont know that that is the case, Mr. Chairman,
but we will note that.
Mr. DEFAZIO. Well, anecdotally, I mean, you say you want to be
customer focusedI guess let me just ask this and then we will go
on the next. If you are going to be customer-focused, you are going
to be real attentive, then, to the majority opinion expressed on the
NPRM, which I believe will be echoing a number of the concerns
you have heard here today.
Mr. SIMPSON. Mr. Chairman, but to answer the earlier question,
if they dont meet the criteria, they can still apply under the Small
Starts program.
Mr. DEFAZIO. I know. But you are basically excluding them from
the Very Small Starts program.
Mr. SIMPSON. Well, no, we are sayingno, we are not.
Mr. DEFAZIO. Because you are establishing
Mr. SIMPSON. No, I dont believe that we are. I really hadnt
given it that much thought, but I asked Mr. Steinmann and he said
no.
Mr. DEFAZIO. Well, you set the $3 million bar, which isnt part
of Small Starts.
Mr. SIMPSON. But all that we know now is that if you meet these
requirements, the project works. Once you get beyond any of those
limitations, then we really have to study the project. That is all we
are saying.
Mr. DEFAZIO. Yes, but you are excluding a mode is I think the
point. Anyway, we wont belabor it.
We will turn now to Ms. Fallin.
Ms. FALLIN. Thank you, Mr. Chairman.
Mr. DEFAZIO. You will probably be the last set of questions before the votes. Go ahead.

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Ms. FALLIN. All right.
I have one question, Mr .Simpson. How does the new rule requiring the FTA to incorporate congestion relief benefit into the New
Starts process? We talked a lot about congestion on our highways.
How will that new rule help with that?
Mr. SIMPSON. Well, one of the things that we are doing is right
now, if we had a congestion program with a pricing component
or let me just back up a step. We dont measure now the impacts
and the benefits. When we build a transit project, there will be a
certain amount of cars that come off the highway as a result of
that, and the people that remain on the highway receive a benefit
because there are fewer cars. We dont measure that in our costeffectiveness, so we think that it is a benefit that is really out there
for people.
So the first question is to ask that and to try towe are going
to work with the Federal Highway Department to try and come
with a model so we can measure that benefit, because it will help
all projects, particularly projectswell, any transit project. It will
help any transit project. So that is the first thing that we are asking the question and proposing to do.
The second thing we are saying is that if you have got a congestion program in place in your town and it happens to coincide with
a transportation project, that we will give you a benefit as a result
of that. If you have a pricing strategy, we will give you one up tick
in your rating because you are, in effect, getting more cars off the
road and there is a benefit to transit that we dont capture that
now. When we do our forecasting to figure out the ridership that
supports the finances of a transit project, we have got no method
ofbecause this is somewhat of a new kind of thing, these HOT
lanes and all that. We have no way to measure the extra riders
that would ride on transit as a result of that.
So we are saying we think we have some things right now with
VMT reductions, vehicle miles traveled, and the like, and we are
also trying to respond to the fact that we know we have a nationwide crisis on highway congestion, and we are trying to do whatever we can to alleviate that and to assist transit while we do so.
I think that sums it up.
Mr. DEFAZIO. Okay, thank you.
Mr. Baird, go ahead. We are going to have two votes, so Mr.
Baird will ask his questions, then we will recess and come back for
a few other questions.
Mr. BAIRD. First question is very quick. Under the fixed guidelines proposal, would ferries still qualify?
Mr. SIMPSON. I believe they do. Yes.
Mr. BAIRD. Thats good. Secondly, in my district, we are working
on the Columbia River Crossing project, and there is a debate right
now, should we go light rail, should we go buses. The advocates of
light rail point out that we can connect to the very successful light
rail system that Portland and vicinity have put in place; others
look at buses as having relative advantages.
To what extent do you prejudice the decision through your proposed rulemaking and to what extent would you take into account,
if there were to be a light rail proposed, because it links up to ex-

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isting light rail, how would that decision-making process be affected by your proposal?
Mr. SIMPSON. Well, it is a simple question with a difficult answer, and I will try to be as quick as I can with it. We measure
each project on its own merit and we look at the alternatives. Basically, a bus rapid transit or a bus project would be less expensive
than a fixed guideway project like light rail.
So, before we look at the cost-effectiveness, we say, okay, where
do we need to be out in terms of our transportation alternatives?
What is the best thing we can do short of the fixed guideway? And
we do a model on that. Then we figure what is the delta, the difference in cost between that bus project, if you will, and the fixed
guideway project. We take the cost of that plus the operating costs
and we look at the differences in travel time savings, how much
more time do we save with the fixed guideway project, which creates a problem for some folks, but it is a metric that we use and
we have used it consistently.
Then there are other attributes that are associated to a fixed
guideway project like the reliability of rail; you dont have to worry
about traffic jams. People like to sit in a rail car; they know where
the tracks are. There are a bunch of things we call a modal constant. So we give another benefit to the fixed guideway in terms
of time, because we want to keep it consistent, so the whole thing
is done in time.
So we look at that project and we look at all of our metrics and
we say, okay, now, based upon what the alternative was and this
new project, does the project meet our cost-effectiveness criteria
along with the other statutory requirements, weighting cost-effectiveness as a key indicator, 50 percent of them.
Mr. BAIRD. So stay with the practical application. It is helpful.
Mr. SIMPSON. Yes.
Mr. BAIRD. So in our community we have got a citizens commission plus the two departments of transportation trying to make decisions. What are the relative differences? They are trying to decide
right now which do we go with.
Mr. SIMPSON. Right.
Mr. BAIRD. How do they factor in your decision-making process
and outcome in terms of deciding what they think is the right thing
to do?
Mr. SIMPSON. They have a transportation plan, a long-term plan,
a medium plan. Typically, it is financially constrained; how much
money do they have to do the project. And when they look at a corridor, they look at the transportation problem and how best to
solve it, and they decide, the local community, not FTA, decides on
locally preferred alternative. The folks that really do their planning
in advance have an idea whether or not those guidelines, if they
wanted a light rail, whether it would meet the Federal requirement
or not. So there is a lot of that. That is why we want to get with
the MPOs in the transit agencies early in the process so we can
help them, so they dont bring us an alternative that might not
be
Mr. BAIRD. What would be the funding difference? What kind of
magnitude of funding difference mightlets suppose our community comes to you and says if we go light rail, it will cost X, if we

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go bus rapid transit, it will cost Y. How much do you kick in on
the choice?
Mr. SIMPSON. Do you mean how much is the Federal share?
Mr. BAIRD. Yes.
Mr. SIMPSON. We look at the project, we look at the size of the
community, the benefits that are derived. On average, we look at
a 50/50 contribution. If it is a mega project, if it is a project that
is in the billions of dollars, around a third, because we do have a
limited amount of funding.
Mr. BAIRD. But my point would be if its 50/50, would you fund
50/50 for bus and also, then, 50/50 for light rail, if they choose
that?
Mr. SIMPSON. It depends. We would look at really what project
winds up coming through the pipeline. We try to have those discussions as early as possible so the transit agency knows what the financial commitment is of the Federal Government.
Mr. BAIRD. Might you be in a position to say we will match 50
percent if you do bus rapid transit, but only 20 percent if you do
light rail? Or if they choose light rail
Mr. SIMPSON. No, we dont do that because we believe it is a local
decision. We really dont directlymaybe indirectly if they dont
meet cost-effective, but we dont directly tell which city what mode,
whether it be a fixed guideway or
Mr. BAIRD. So they dont necessarily have to factor that in.
Mr. DEFAZIO. There are three minutes remaining to the vote,
Brian. You have a little bit of time left, so you can finish up when
we come back.
Mr. BAIRD. We will get to this later.
Mr. SIMPSON. Okay.
Mr. DEFAZIO. Thank you.
We will recess probably for 10 to 15 minutes.
Mr. SIMPSON. Thank you.
[Recess.]
Mr. DEFAZIO. The Subcommittee will come back to order.
We appreciate the Administrators and the other witnesses tolerance of our hectic schedule.
I guess, sort of following up on a subset of Mr. Bairds questions.
First, as I would understand, when you are talking about approximately 50/50, you are talking about very large projects, where a
smaller share was requested, is that correct?
Mr. SIMPSON. Usually, the grant recipient comes to us with a
plan. We take a look at a whole bunch of things: how we funded
other projects, how much money is left in our statutory authority,
things like that; what is the ability of the grant recipient to pay
their share. So there are a whole host of things, and it is usually
that is never really an issue, Mr. Chairman, with a grant recipient,
in terms of funding projects. But we dont dictate in any way what
the Federal share is.
Mr. DEFAZIO. But this all then gets back somewhat to cost-effectiveness. I mean, the issue is if in a local jurisdiction there are contributions that constitute betterments that are no burden on the
Federal taxpayer, contributed by the local business community, developers, whatever, local improvement district was formed that
paid for them, however they were paid for, do those get cranked

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into the cost-effectiveness? And if so, why, because I dont think
that they should be.
Mr. SIMPSON. Mr. Chairman, you are not alone in that regard.
We actually asked the question in the NPRM. Right now there are
two things. You can have several definitions of betterments, but
betterments are components of the project that are not essential,
so that if you do away with the betterments, you still get all the
benefits of the project. An example might bealthough my wife
wouldnt like this exampleart work in the stations. Art is a betterment.
So right now the betterments are captured, so what we do sometimes, we tell the grant recipient, if they dont meet cost-effectiveness, are there any betterments that you can take out? You know,
how many betterments can you take out and still keep the project?
So we are trying to get to the point where, hey, what are the essential components of a project. Then we ask the question, in terms
of betterments, do we need to count those or should we count those,
because, particularly with the private sector, as you hit on, private
sector sees the value in transportation projects and currently, if
there was any private sector contribution, we count that.
So the question that we ask is if we have a particular project
and there are a lot of projects where developers, landowners, private interests see tremendous value that accrue to them as a result
of this federal-State investmentshould we or could we exclude
those contributions to cost-effectiveness. And the rationale for that
would be if it is not costing the taxpayer any money, there is a betterment as a result of that, there is something that is accruing, like
a donation from the private sector, so we believe that that has
merit to look at, so we have asked the question.
And that might also help some of these other projects that, as
you mentioned, streetcars, where there is certainly a value to developers and people particularly close to the investment. They see
a value, and many streetcar projects are being funded privately, so
we asked the question if we have a project that were to come forward before the FTA, if there is a private contribution, should we
exclude the private contribution from the project and from cost-effectiveness.
Mr. DEFAZIO. So that is outstanding as one of the questions in
the rule?
Mr. SIMPSON. Yes.
Mr. DEFAZIO. And you are taking comments on that?
Mr. SIMPSON. And would like to get comment on that.
Mr. DEFAZIO. Because it seems to me part of the rationale for the
cost-effectiveness criteria is, one, to have a screen, but, two, theoretically, to look at what is the cost-benefit for Federal taxpayers.
You are also looking essentially at financial soundness, risk, debt,
those sorts of things, and if the betterments are not constituting a
financial overhang that has the potential to bring this system
down, I dont see why they would have to be calculated in at all;
and/or if you built the system and the betterments were essentially
an add-on and someone added on the betterment after the system
was approved or built, we wouldnt count it. I mean, at that point
you cant count it, right?

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Mr. SIMPSON. I cant express my view on it because we have the
rule, but I hear what you are saying.
Mr. DEFAZIO. I understand.
Mr. SIMPSON. You know, that might alsoyou know, when we
talk about economic development with respect to certain projects,
that we are not measuring economic development, particularly, you
know, we put the cards out on the table, this streetcar projects, addressing that question might be able to give you thewhat is the
true economic value of a streetcar project? Well, maybe it is that
value that the private sector decides that they feel that it is worth
that is given as a contribution to a project and excluded from costeffectiveness.
Mr. DEFAZIO. Again, further on economic development, you mentioned in your testimony that you have engaged a consultant?
Mr. SIMPSON. Yes.
Mr. DEFAZIO. Are the results of that consulting going to be accommodated in the rule or is this consulting result going to come
in after the rule is already finished? What is the timing on that?
Mr. SIMPSON. I cant give you an answer on that right now, I
dont know.
Mr. DEFAZIO. Okay. But it seems that if you have gone to the
trouble and expense of engaging a consultant, that hopefully that
contract will be structured in such a way that it will inform the
rule, since it is a statutory criteria.
Mr. SIMPSON. Absolutely. And it is a priority and we have got a
meeting here in Washington, D.C. on October 17th with nine of the
Nations top transportation experts to discuss economic development as part of the phase two.
Mr. DEFAZIO. Okay. Could we get a list of those and what firms
or organizations they represent?
Mr. SIMPSON. Yes, you can.
Mr. DEFAZIO. Okay, great. Thank you, Mr. Administrator. Appreciate that.
Now, I have a question, and it seems to me it is a no-brainer,
but apparently there is some theory or controversy out there, and
that is the issue of does transit provide significantin fact, there
was a press conference going on upstairs just before this with
APTA talking about the benefits of mass transit in terms of congestion mitigation and the amount of fuel it saves. I mean, you can
quantify it to a great extent. So is it the position of the department
that these projects, absent this ancillary action by another body to
impose congestion pricing or something, but just the construction
of a transit project itself, is it intended to mitigate congestion?
Mr. SIMPSON. A transit project serves a whole host of purposes.
As you know, it promotes good economic development, environmental benefits, and also to alleviate congestion, as outlined in
SAFETEA-LU.
So I dont know if I understand the question, but I am agreeing
with you that it achieves all of those things.
Mr. DEFAZIO. All right. Okay. Well, no, there are some people
out there saying transit sort of exists, but it is really not addressing congestion; they sort of take it for granted and dontI mean,
if you had a strike tomorrow and shut down the New York subway,
I think what a benefit it had been.

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Mr. SIMPSON. That is exactly what thought came to mind when
you mentioned that. If somebody is not sure that transit fights congestion, then they need to take a look at the articles in New York
or anyplace else that had a transit strike, or even just a service
failure or disruption of service as a result of a power outage.
Mr. DEFAZIO. Right. Okay. I see that I have been joined by the
Ranking Member.
Oh, do you have some questions? Okay, I recognize the gentleman, Mr. Dent.
Mr. DENT. Thank you, Mr. Chairman.
Mr. Simpson, I realize I came in after you presented your testimony, but I just wanted to relay some comments to you and just
ask for your response. In my community there is a lot of talk about
passenger rail from the New York metropolitan area into the Lehigh Valley of PennsylvaniaAllentown, Bethlehem, and Easton.
The lines currently run to around Clinton, New Jersey, and getting
them from Clinton to the western edge of New Jersey and Phillipsburg is, of course, a challenge. There is talk about running passenger rail from Lansdale, just north of Philadelphia, up to a community called Quakertown, a lot of talk about it.
And I would like you to comment, too, if the community were to
express interest in a New Starts program or Small Starts, what
should I tell them about the local matching requirements? What
would be their obligation for that type of a passenger rail project?
Mr. SIMPSON. First of all, I am very familiar with that alignment.
I have spent, I dont know, hundreds of days in Allentown and the
whole 78 corridor, and was just in Clinton, New Jersey two weeks
ago.
Mr. DENT. And there is a study going on right now on the 78 corridor.
Mr. SIMPSON. There is a study. I think in that particular case,
I think there would be some sort of a bi-State agreement between
New Jersey and Pennsylvania.
Mr. DENT. That is correct. First phase was completed as it relates to non-rail options and we are developing the rail phase now.
Mr. SIMPSON. Not dissimilar to what we do elsewhere, I think
that we would need to get all the stakeholders in a room and determine who would be the grant recipient for the project; what would
be the entity, do you need to create a new entity; and what is the
you know, you have got two States, so what is the share of the dollars that would flow through. You may have to develop a port authority or some sort. But if you would like, we would be more than
happy to contact your office after we leave here and fill you in, because the FTA would be very helpful in assisting your community
with that proposed commuter rail line, I believe it is.
Mr. DENT. Yes, commuter rail. And I guess that is the question,
too. Oftentimes I tell the community that there will be a local
match requirement.
Mr. SIMPSON. Right.
Mr. DENT. And what are you stating as official policy for the FTA
now in terms of local match for these types of New Starts?
Mr. SIMPSON. Official policy is that you need to come up with at
least 20 percent, and we would encourage an overmatch, anything
above that; and then it depends on the communitys ability to con-

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tribute their share, along with what we have done historically in
the past, we like to have a level playing, and within the transit
community there is sort of an understanding of how much money
you should ask for given the certain size and complexity of a
project.
Mr. DENT. Is that local funding requirement consistent for both
New Starts and Small Starts?
Mr. SIMPSON. It is the first thing we look at, and that is where
we get into a lot of problems, where we believe there is a commitment on a local level and then, as time passes, for one reason or
another, the local commitment fades, and that is why the project
becomes a no-start.
Mr. DENT. Well, I would be very happy to further discuss this
issue with you.
Mr. SIMPSON. Absolutely. We will contact you as soon as soon as
we leave here.
Mr. DENT. Thanks for your testimony.
Okay. And just one final question that I have. The FTA, as you
know, has been working with FHWA to develop a mobility measure
that explicitly includes congestion relief benefits to highway users
and pedestrian ridership of transit systems. What is the status of
that effort?
Mr. SIMPSON. We have allocated some research dollars. I believe
it is $100,000. We are working with FHWA as we speak because,
as this Committee asks us to do all the time, to measure all of the
benefits that accrue to a given transportation project, and what we
dont measure right now is if we were to build a new transit project
in a corridorlets take your project. Lets say we build your
project.
What we havent been able to do isand lets say I-78 from Allentown going to Newark, everybody wanted to go to Newark on I78, and we are at peak period in the travel, you know, it is congest.
The I-78 can get congested, as you know. So lets say the transit
project is good enough where we are able to take off a portion of
those vehicles that now ride transit. Well, we pick up the benefit
of the folks riding transit, but we dont pick up the travel time savings that accrue to the people that stay in the automobiles.
So what we are saying isI mean, this would be the best case
scenarioif it took an hour to get from Allentown to Clinton in
traffic, maybe it would take 40 minutes for all those other drivers
if we took 5 percent of the drivers off the road. We want to be able
to measure that and measure that within cost-effectiveness, because it truly is a benefit of travel time savings.
Mr. DENT. Thank you. I will yield back to the Chairman.
Mr. DEFAZIO. Ms. Hirono, do you have further questions?
[No response.]
Mr. DEFAZIO. Mr. Boozman?
Mr. BOOZMAN. Very quickly. We appreciate your being here. You
said that you needed at least 20 percent. In reality, what is that
percent really, though? Now, because of the
Mr. SIMPSON. An average? I would say it is averaging about 50
percent.

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Mr. BOOZMAN. So it is about 50. And that is just because of the
competition, the people that are saying that they will come up with
50 percent?
Mr. SIMPSON. Well, you know, it is a whole host of things. I
mean, if we have got a couple of projects in New York that were
mega projects, literally in the billions, so you could easily wipe out
20, 30 percent of the statutory authority if you were to fund it at
the maximum. So we really work closely with the transit agencies,
and that has really not been a problem with us. We bend where
we have to. You know, I am surprised that there are that many
questions on that topic, but that is something that never crosses
my desk, it is really never an issue. I guess there is an understanding out there with the transit properties where we are at on
that.
Mr. BOOZMAN. So there is enough competition out there that people will come up with the dollars up to the 50 percent?
Mr. SIMPSON. Yes.
Mr. BOOZMAN. It makes it tough if somebody without as much
resource only has a 20 percent. That really
Mr. SIMPSON. We understand that and we work with the grant
recipients.
Mr. BOOZMAN. Okay. Thank you very much. Thank you for being
here.
Mr. SIMPSON. Thank you.
Mr. DEFAZIO. One last question. SAFETEA-LU authorized a
study that is being, as I understand it, done jointly under the auspices or sponsorship of FTA and HUD, Reconnecting America,
which is towe have been talking about sort of the economic benefits that result from transit projects, but we havent really gotten
into this aspect of it, which is the linkage between affordable housing and transit, and I am wondering when that studys results are
going to be available. Again, it is sort of like my last question. Are
those results going to be available before you finalize your NPRM?
Mr. SIMPSON. Mr. Chairman, to my knowledge, that study has
been published and it has been out for at least six months.
Mr. DEFAZIO. Okay.
Mr. SIMPSON. And if you would like to talk about the results of
the study, I can, but the study has beenand I apologize if your
office has not gotten a copy of it.
Mr. DEFAZIO. So, again, those results will inform the rule to
some extent. To the extent they find there is a linkage between affordable housing or the potential for affordable housing would seem
to me, again, to be a benefit that would need to be looked at in
evaluating transit projects.
Mr. SIMPSON. You know, we do that within the mobility factor,
but I will tell you what the takeaway for me was with that study.
We have said it here, that as a result of building transportation
multi-use development around transit nodes, the price value goes
up. It is more expensive to rent an apartment or to buy an apartment or a home which is within walking distance of a transit property. And the people who need to be able to walk and to get to work
the most are the people sometimes who cant afford it, and it is a
concern that we have at FTA and it is a concern that HUD has,
and we have talked about it.

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Mr. DEFAZIO. Sure. Well, that is a general urban redevelopment
rule of thumb, but some communities, for instance, not to be totally
parochial, but Portland has a requirement on the developers that
they provide a certain number of affordable units in doing their developments. So, I mean, the question is since we talked about you
get scored for planning and those sorts of things, would you get
some benefit or scoring for having a policy to provide affordable
housing in these corridors?
Mr. SIMPSON. Absolutely. We capture it under transit dependent
mobility, and it is
Mr. DEFAZIO. So that will be expressed in the final rule, then,
that this would be
Mr. SIMPSON. Well, the proposal that we have right now on the
street clearly articulates that.
Mr. DEFAZIO. Because it certainly wouldsome entities havent
done that, and it would certainly potentially encourage entities who
are interested in qualifying a project to undertake to see that, as
the development took place, that they were providing for some
place for affordable housing.
Mr. SIMPSON. Well, FTA and the DOT believes in that and HUD
believes in that and the Administration believes in that, so we will
make sure that it is part of it.
Mr. DEFAZIO. Okay, thank you. I have no further questions.
Mr. Duncan?
[No response.]
Mr. DEFAZIO. All right, with that, we thank you once again for
providing your time and your expertise, Mr. Administrator, and we
look forward to a totally transmogrified final rule.
Mr. SIMPSON. It has been a pleasure and honor to be here, and
as I said in the past, I look forward to our next hearing.
Mr. DEFAZIO. I would call the next panel: Mr. Christopher Zimmerman, Arlington County Board Member; Mr. Michael Townes,
Hampton Roads Transit; Mr. Mark E. Huffer, Kansas City Transportation Authority; and Ms. Shelley Poticha, Reconnecting America, although she does have an Oregon connection.
TESTIMONY OF CHRISTOPHER ZIMMERMAN, ARLINGTON
COUNTY BOARD, BOARD MEMBER, ARLINGTON, VA; MICHAEL TOWNES, HAMPTON ROADS TRANSIT, EXECUTIVE DIRECTOR, HAMPTON, VA; MARK E. HUFFER, KANSAS CITY
AREA TRANSIT AUTHORITY, GENERAL MANAGER, KANSAS
CITY, MO; AND SHELLEY POTICHA, RECONNECTING AMERICA, PRESIDENT AND CEO, OAKLAND, CA

Mr. ZIMMERMAN. I have always thought it should be a prerequisite for service in higher office that one serve in local government first.
Thank you, Mr. Chairman and Members of the Subcommittee. I
am pleased to be here this morning. I am Chris Zimmerman, a
member of the County Board of Arlington, Virginia, right here
across the river, in which capacity I serve on the various regional
transportation bodies around here, like the Washington Metropolitan Area Transit Authority and the Northern Virginia Transportation Authority.

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I have submitted, of course, a full statement for the record, but
I just wanted to make a few comments and then answer your questions.
The community that I have the opportunity to represent is today
a very thriving urbanizing community that enjoys extremely low
employment, extremely low office vacancy rates, and is widely cited
as a model of what is now called smart growth nationally and even
internationally. Five years ago, when the Environmental Protection
Agency gave their first smart growth award for overall excellence,
it was to Arlington for the Roslyn-Ballston corridor.
That stands in contrast to where it was a generation ago, when
it was a fairly typical declining inner ring suburb, with declining
population, with schools that were emptying out, with retail that
was really dying. When you wanted to go to a restaurant, you went
outside. When you wanted to go shopping, you went outside.
It has really turned around in the last generation largely because
of the foresight of people who served before me, but also because
they were able to leverage a big public investment with a significant Federal contribution in the Metro system, and then use that
effectively to create the Roslyn-Ballston corridor and the Jefferson
Davis corridor, which are about 10 percent of the land area of my
very small county, smallest county in America, effectively at 26
square miles. Ten percent of that land is generating half the tax
revenue that we collect.
The 26 square miles in Arlington, out of a Northern Virginia region of over 1,000 square miles, accounts for about 60 percent of
the transit ridership. Sixty percent of all trips in Northern Virginia
begin or end in Arlington. We have some of the highest transit
usage, with over 23 percent of rush hour trips being madeof
workday trips, I should say, being made on transit; and in our
Metro corridors it is more like 40 percent.
Now, the reason I cite all this is that I believe that if the rules
that are in place now, or that are proposed now, were in place at
the time, that that transit investment could not have been made.
I dont believe Arlington would have qualified for the funding that
made this possible under the regulations as they are now being
pursued by the FTA. As it happens, today we are looking at the
next generation of transit development, and we are looking both to
redevelop in the Crystal City area, where we have the biggest impact of BRAC from the last round anywhere in the Country, with
18,000 jobs scheduled to leave Crystal City; and we are looking at
what has to be done to make it again a vibrant economic center,
and we are looking at transit investments obviously as part of that.
Not far from there and connected to it, hopefully, is the Columbia
Pike corridor, where we are looking to transform what has been an
automobile-oriented strip into a more walkable main street, and we
have a streetcar project, very much modeled on the Portland streetcar, which we think has the same kind of potential for economic
growth and transforming an area, really, that you have seen in
Portland.
However, we dont think that the current rules will make it possible for us to get any help from the FTA and the Federal Government the way they are proposed now, and we are looking at what
we have to do and what we can accomplish on our own because we

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really dont see any way that we would qualify. The specific rules
that are being promulgated would make it very difficult for our
projects to qualify, which seems fairly strange because they look
like exactly the kind of projects that you intended in passing the
last law.
The Columbia Pike streetcar project, for instance, which is about
a five to six mile stretch, is a project under $250 million, probably
$120 million, $140 million, something like that. If we could get 50
percent money, then $60 million, $70 million, something like that,
would seem to be within the parameters. But the way the rules are
being promoted, we would not likely qualify.
The ridership that we have been able to encourage already is
held against us rather than working for us. The additional funds
that we will put in and the higher costs that are involved in an
urban area work against us, even when we are spending our own
money. So, in short, this is fairly frustrating and seems to us to
be counter to the intentions of Congress in passing the last act.
Finally, let me just say that I think our commitment to transit
as an integral part of community and economic development would
be the model that was intended and that you would want to promote in the interest not only of our region, but the Nation, but it
doesnt seem to be the model that the proposed regulations would
promote.
Again, Mr. Chairman, thank you very much for inviting me here.
I look forward to your questions.
Mr. DEFAZIO. Thank you, Mr. Zimmerman.
Mr. Townes.
Mr. TOWNES. Thank you, Mr. Chairman. It is an honor to be here
with you today. I appreciate the opportunity to testify on the Notice
of Proposed Rulemaking. I want to note that while I am the incoming chair of the American Public Transportation Association, the
testimony that I present today represents my views, and not those
of APTA, regarding the proposed rulemaking.
I also want to note that on October the 1st, the City of Norfolk,
Virginia, the entire Hampton Roads region and HRT will celebrate
the signing of a full funding grant agreement for $232.2 million for
a 7.4 mile starter light rail line in the City of Norfolk. I want to
thank Congresswoman Drake, who was here earlier, for her strong
consistent support of this project, as well as Administrator Simpson
for making this project a reality.
I dont have enough time to touch on all the points that I think
are important with the proposed rulemaking, but I will touch on
three in the time that I have, and that includes provisions not included in SAFETEA-LU that are in the proposed rulemaking, the
land use and economic development measures weights, and the
weight given to cost effectiveness, things you have talked about
earlier today.
The Notice of Proposed Rulemaking contains provisions that
were not addressed by Congress when it adopted the Safe Accountable Flexible Efficient Transportation Equity Act, a legacy for
users, but represents substantial changes to the New Starts program. The proposed rulemaking would change the definition of
fixed guideway and allow New Starts and Small Starts funds to be
used for high occupancy toll lanes. This proposed change is not

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found anywhere in 49 U.S.C. 5309. This change is intended to alter
the purpose and focus of the New Starts program. The only conclusion that can be drawn from this proposed change is that the FTA
intends to diminish the historical investment and traditionally
fixed guideway projects.
I would also note that there is no requirement that the transit
service which served to establish the amount of the section 5309
investment be maintained after the project is built. Now, why
would the FTA support funding a project where there is no ongoing
commitment to maintaining transit service in the corridor?
The proposed rulemaking also seeks to redefine these projects
that are eligible under the Small Starts program and develop a
program that is not neutral as to project eligibility or the level of
project review.
I have identified those changes in my written testimony; I wont
belabor that point.
With regard to land use and economic development measures
and weights, Congress amended section 5309 in SAFETEA-LU by
emphasizing the importance of land use and economic development
when it moved these criteria from the consideration subsection to
the project justification subsection. To the outside observer, it
seems clear that the intent of Congress was to put greater weight
and emphasis in the New Starts project evaluation and review
process on land use and economic development. Instead, the proposed rulemaking diminishes the weight to be given to land use by
combining it with economic development as a single factor and assigning only 20 percent to that weight.
Moreover, 5309 establishes separate criteria for land use and economic development, which would appear to clearly indicate an intent by Congress to develop separate measures for each. Instead,
the proposed rulemaking not only reduces the weight and emphasis
given to land use and economic development, but merges them into
a single criteria rather than developing separate measures.
Furthermore, FTA states that the cost to develop a measure for
economic development that is distinctive from land use is overly
costly and burdensome. Now, I dont recall that the cost or burden
on transit authorities was an issue when FTA developed the Summit software and implemented the TSUB measure for cost-effectiveness in 2002. While I dont know what it costs FTA to develop
the software and implement TSUB, many communities, including
mine, were required to spend several hundred thousand dollars to
revise travel demand models to be able to interact with Summit
and capture the user benefits in ridership.
Finally, FTA should be rewarding communities that seek to concentrate economic development in project corridors or at stations
through the use of local policies and incentives. The benefits of a
project are not measured solely in terms of mobility improvements,
but also on the impact of shaping economic development patterns.
Finally, weights given to cost-effectiveness. Prior to the March
and April Dear Colleague letters, FTA employed a multiple measure approach that enabled a medium or medium-high rating for
land use to offset a medium-low rating for cost-effectiveness. Even
with a medium-low rating on cost effectiveness, a project could not
obtain an overall project rating of medium, based on receiving a

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medium or high rating on the land use plans in the region where
the project was being built.
The March and April 2005 Dear Colleague letters changed FTAs
policy, but were not implemented as a permanent change to regulation. In the Notice of Proposed Rulemaking, FTA has not only chosen to require 50 percent weight for cost effectiveness, which effectively trumps all the other project evaluation or review criteria, but
also attempts to make it permanent law through inclusion in the
notice.
I hope the Committee would agree that the proposed allocation
of weight and excessive emphasis on cost effectiveness is contrary
to your intent when you adopted SAFETEA-LU, and I hope that
you would agree that the incorporation of specific weighting of criteria should not be included in the final rule, but continue to be
left to guidance documents to enable FTA to shift the allocation of
weights as might be appropriate in the future.
Thank you for the opportunity.
Mr. DEFAZIO. Thank you, Mr. Townes.
Mr. Huffer.
Mr. HUFFER. Good morning, Mr. Chairman and Members of the
Committee. My name is Mark Huffer. I am the General Manager
of the Kansas City Area Transportation Authority, also known as
KCATA, and we are the regional transit authority serving the Kansas City, Kansas-Kansas City, Missouri metropolitan area.
While we are pleased to make comments on the NPRM today regarding the New Starts program, I am going to limit my comments
to the Small Starts and Very Small Starts categories only, as they
are most closely related to two recent major capital investment
projects in the Kansas City area, one of which is already implemented and the other one is planned.
In 2005, KCATA opened the regions first bus rapid transit
project known as MAX. MAX was built at a cost of approximately
$3 million a mile and would have met all the criteria of a New
Starts program had they been in place at that time. Since New
Starts program was not in existence in 2002 through 2005, when
we constructed this project, Federal funding was instead attained
through a series of discretionary grants spread out over four Federal fiscal years.
The uncertainty of Federal funding and the timing of the revenue
stream presented significant challenges in making construction
awards and phasing implementation of this project. Without a longterm Federal commitment, the scope and size of the project was
changed numerous times.
MAX has been an unqualified success. Ridership in the corridor
is up over 40 percent. Thirty percent of our customers are new to
public transit, and customer satisfaction is exceptionally high. Because of the success of this program, FTA has been very supportive
of KCAs effort to expand into other corridors in the community
and, in fact, MAX has already received Federal funding commitments of $24 million under the New Starts guideline to expand into
the Troost corridor in 2009.
In general, we applaud the congressional decision to establish a
separate Small Starts category for New Starts funding in
SAFETEA-LU. This program will allow projects like ours to move

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quickly, allowing the community to benefit from these projects at
a quicker pace.
I want to comment on Small Starts right now, and that is that
the NPRM defines a Small Starts project as one with a total project
cost under $250 million, with 5309 funding not to exceed $75 million. While we fully support the concept of Small Starts, we are
concerned that the proposed changes do not go far enough in
streaming the New Starts process for projects under Small Starts
category. The process of getting to an FTA funding decision on a
Small Starts project still appears to be arduous and time-consuming, requiring nearly the full range of FTA New Starts criteria
and processes.
We believe it was Congresss intent to enable recipients to expedite implementation of significant capital investments; yet, the
New Starts evaluation criteria require a full alternatives analysis,
as well as a NEPA environmental study, regardless of the nature
of the project. These two elements are among the most burdensome
and deliberative steps in receiving Federal funds. There is little advantage to seeking Small Starts funding as long as these requirements are not changed.
Additionally, we believe that FTA should reconsider and clarify
the provision that prohibits a corridor project from being divided
into several Small Starts projects. We concur that a corridor should
not receive several Small Starts funding for projects concurrently,
and that projects should not be artificially segmented just to qualify as a Small Start. However, given the long lead times and high
capital costs for implementation of major capital investment
projects, phased implementation is a realistic approach, and the
benefits of such approaches should be recognized.
For example, if a metropolitan area makes a decision to build a
20 mile corridor, it might choose to implement the system in three
separate phases over several years. If the phasing is appropriate
and NEPA requirements met, FTA should consider each phase for
Small Starts funding eligibility, even though the total 20 mile line
might otherwise qualify for New Starts.
In regards to Very Small Starts, this has been a program that
we believe will be beneficial to Kansas City. As a result of the less
stringent requirements for the Very Small Starts program, we will
be able to implement the Troost BRT-MAX corridor project within
four years of corridor planning. We are generally supportive of
FTAs Very Small Starts requirements, but we believe that FTA
should consider eliminating the local financial commitment criteria
regarding local overmatch of Federal funds. We recognize that FTA
will not rate any project below medium for failure to overmatch,
but question whether it should be an evaluation criteria for
projects of this size at all.
Similar comments in New Starts regarding Small Starts. We believe FTA should reconsider and clarify how the requirement requiring all projects in the corridor to be considered together for
evaluation purposes will be implemented. If multiple-phase projects
qualify and are appropriately defined with independent utility,
KCATA believes each phase should be independently evaluated as
a Very Small project.

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We do have a concern that the $3 million per mile threshold,
even exclusive of vehicle acquisition, will result in a modal bias toward bus projects. Further, we encourage FTA to consider raising
that threshold or at least indexing it to allow for inflationary
growth, because it is very possible that within several years, even
BRT projects will not be able to be built at $3 million a mile.
Finally, we react very favorably to the concept of the project construction grant agreement for Very Small projects. We find this to
be a beneficial requirement that will provide the same assurance
as a full funding agreement for much larger projects.
We thank the Congress for your interest in this. We support the
direction taken by Congress and FTA to streamline the New Starts
process and encourage FTA to consider all possibilities to continue
to make the process from beginning to end more expedited.
Mr. DEFAZIO. Thank you, Mr. Huffer.
Ms. Poticha, we have about seven and a half minutes to go, so
rather than hurry through your testimony, I think we will reserve
your testimony until after the short recess, and then we will proceed to questions. At that point, I have to go to the markup in resources and Ms. Hirono will take the chair, unless Chairman Oberstar wants to take the chair. He can always have the chair whenever he wants.
So, with that, we will stand in recess until probably about 15
minutes ago. Thank you.
[Recess.]
Ms. HIRONO. [Presiding] We are back. Good afternoon. Okay, we
are on Ms. Poticha. Please proceed.
Ms. POTICHA. Good afternoon, Members of the Committee. Thank
you very much for the opportunity to appear before you today. I am
Shelley Poticha, President of Reconnecting America, a national
nonprofit dedicated to using transit investments to spur a new
wave of development that improves housing affordability and
choice, revitalizes downtowns and urban and suburban neighborhoods, and creates lasting value for our communities.
We host the Center for Transit-Oriented Development, and
thanks to language included by this Committee in SAFETEA-LU,
we receive Federal funding to provide standards, guidance, and research on transit-oriented development for the 40 regions that either have or are planning new transit lines.
As I go from region to region, it is clear that there is a thirst for
new and increased investments in transit. First of all, transit ridership is at a 40-year high, with three-quarters of the growth coming
from heavy, light, and commuter rail. We are finding that mayors
value transit to help spur urban regeneration and reduce traffic
congestion; businesses value transit because employees can get to
work on time; and transit is viewed as a key amenity in attracting
the highly desirable creative class to local economies Developers
see an untapped market for housing near transit and are designing
new products and new neighborhoods to meet this demand. And
communities recognize that when all the pieces come together,
transit can help improve the quality of life and lower cost of living.
A common thread in every one of these places is the recognition
that transit is a powerful tool that is made more powerful when

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combined with proactive land use an economic development strategies.
Despite these encouraging trends, we hear frequent complaints
about the Federal partnership. Funding for transit is not keeping
up with demand or rising construction costs. The length of time,
the complexity, and the added cost of trying to navigate the Federal New Starts process is increasing and placing an undue burden
on transit projects, while high rate projects receive much less scrutiny. There is a growing concern, whether real or perceived, that
including a full range of amenities, streetscape improvements, and
pedestrian safety enhancements in a proposed transit project will
jeopardize Federal funding.
Yet, these are the very features that help maximize walking trips
to transit and create high value urbanism. Local concern over
meeting the cost-effectiveness index has led some communities to
short-change the number of transit stations, rail cars, or corridor
enhancements that would help meet or even exceed 20 year ridership projections.
In addition, our research shows that actual ridership on many recently built transit lines is higher than predicted by FTAs Transit
System User Benefit or TSUB model. Some lines, such as Minnesotas Hiawatha Light Rail and the Metro Red Line in Houston
are outperforming their ridership estimates 15 years ahead of projections. This raises significant concerns about the substantial
weight placed on these model results.
The good news is that over-performing lines give transit agencies
and communities the momentum and political capital to expand
their transit systems to benefit more of a region, but the bad news
is that these over-performing lines are resulting in a shortage of
transit vehicles, parking spaces, inadequate tracking or maintenance facilities, or the inaccurate evaluation may have contributed
to a downgrading to lower capacity technologies. Ridership numbers are the primary input into the FTAs model to compute costeffectiveness.
Last fall, in response to requests by FTA for specific guidance on
how economic development could be evaluated and defined apart
from the land use criteria, our Center for Transit-Oriented Development commissioned research on the topic; convened meetings
with academics, practitioners, and economists; and we found that
there are different definitions of economic development that are
being used.
Without congressional direction on how to interpret economic development, FTA appears to be trying to define economic development as the impact of a proposed transit investment on the regional economy; whereas, local governments and practitioners are
trying to maximize and coordinate the transit investment to leverage and focus economic development and growth in a proposed corridor.
We believe that there are a number of commonly used indicators
and metrics for evaluating economic development that could be incorporated into the transit evaluation process, and they do not require the creation of a new black box model.
The Federal New Starts and Small Starts programs sets the
rules for engagement in how communities coordinate proposed

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transit investments with larger regional decisions about population
growth and economic development. I urge you to remain steadfast
in your intent to implement this congressional directive. We need
a strong partner for communities that are trying to create new
transit investments that provide residents with greater transportation choices, use transit as a development strategy, and promote
more travel options that reduce greenhouse gas emissions.
We cannot afford a Federal transit policy that may result in less
transit being built or that makes it more costly and uncertain to
obtain Federal funding. We would welcome the opportunity to work
with FTA on these processes and rules to help create a fair economic development and land use set of evaluation processes.
Thank you very much for the opportunity to appear before you
today.
Ms. HIRONO. Thank you very much to all of the panelists, and
we will begin questioning.
I would just like to start by asking Mr. Zimmerman, you heard
me question Mr. Simpson regarding the directive that they issued
in July of this year. Do you have a concern that FTA will use their
July 20th directive, which does give weight to the cost benefit factor, that they would use that in their analysis of New Starts and
of Small Starts pending the adoption of the new rules, which could
take a while?
Mr. ZIMMERMAN. Yes, that is precisely the concern. Of course, the
way it is drawn up, the cost factors seem to work against us; the
benefit factors work against us with things multiplied by costyou
know, costs including things potentially that desire expense, in any
case, or enhancements we may make that may make the investment more valuable in the long-run; and, on the other hand, the
benefit side not counting for some of the real reasons for making
the investment in the first place, which the statute seem to include
as two distinct criteria. So, you know, with the indication that that
is the way they are going to evaluate any proposal, it leads me to
question whether there is any point in submitting such a proposal.
Ms. HIRONO. So pending the adoption of the new rulesand we
hope that they will be changed to reflect the will of Congress and
the underlying legislationwhat can we do so thatI am a new
Member of Congress, so I need to ask these questions. What can
we do to direct the FTA to not impose these kinds of percentage
requirements that are not in the statute?
Mr. ZIMMERMAN. Well, it would be my hope that Congress could
give pretty clear direction that it meant what it said, perhaps by
some of the things that I think Ms. Poticha was suggesting, you
know, perhaps providing a more clear definition, you know, going
beyond what you have already done. I mean, I imagine it must be
very frustrating, frankly. The government I work in, the management doesnt get to not do what we put in law. But that certainly
looks to me like what is happening here. But if you cant get them
to do what you already told them, perhaps you have to give them
more specific instruction. Other than that, I am not really sure.
Ms. HIRONO. Thank you.
Mr. Huffer, you indicated that you basically support the direction
of these new rules as it relates to your State and what you are
doing there, is that correct?

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38
Mr. HUFFER. Generally for and in particularly for Very Small
Starts program.
Ms. HIRONO. Very Small Starts. You heard some of the other testimony that the proposal for the Very Small Starts could actually
push a lot of jurisdictions into going in that direction so that they
dont have to undergo the full range of analysis and assessment. Is
that of concern to you?
Mr. HUFFER. Our primary concern with Very Small Starts relates
to the cost per mile. We think that that probably prohibits streetcars and forces communities into bus rapid transit. We have two
bus rapid transit projects, one developed that was under $3 million
per mile, including vehicles, and one that is being developed that
will be under $3 million excluding vehicles. But we fully believe
that we would never be able to do even a BRT in future years with
that $3 million threshold in there.
Ms. HIRONO. So aside from wanting to increase that $3 million
per mile, you dont share the concerns expressed by I think it was
Mr. Townes, that the new Very Small Starts would actually move
a lot of projects into those modes of transportation that would be
covered under
Mr. HUFFER. Our primary concern, again, is that it would prohibit communities from proceeding with a streetcar project. But
what we do like is that, as Administrator Simpson said, those
projects are small enough that they pretty much automatically
qualify for Federal funding, and you can really expedite that process at that point. But we do have issues with some of those items
as it relates to Very Small Starts.
Ms. HIRONO. Thank you.
Do the Members have any questions? Mr. Boozman?
Mr. BOOZMAN. Thank you, Madam Chair.
Mr. Townes, congratulations on moving your Norfolk light rail
project through the New Starts process and executing your full
funding grant agreement next Monday, October 1st. Having just
been through this process under the current New Starts rules, do
you believe that any of the changes in the new proposed rule will
make the process easier or faster than for the project sponsors?
You are a guy that has just gone through this. Are any of the proposed changes, do you feel like that will help or speed up the process?
Mr. TOWNES. No, sir, I dont believe that the process, as outlined
in the Notice of Proposed Rulemaking, will go any faster or be any
less complicated, and I dont think it is fair or reflects the intent
of this Committee or Congress in terms of bringing new measures
into the process so that the true benefits, not just the cost-effectiveness benefits, of these projects are recognized.
Mr. BOOZMAN. Okay. Very good.
Mr. Huffer, do you believe that a bus rapid transit project such
as the Metro Area Express or the Troost corridor BRT generates
transit-supportive land use and positive economic development effects? And can you give us some examples?
Mr. HUFFER. Sure. We will say, first o fall, yes, we do believe
that it does produce positive economic development effects and does
help with transit corridor development, but not to the extent to
rail. We would never believe that to be the case.

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But I think a good example is on our main street MAX, our first
project that was open, the businesses in that corridor formed a
community improvement district by which they tax themselves and
hired additional security, additional people to clean litter control,
just because they saw that as an advantage; they saw that MAX
was working in the corridor, and to them it was helping to bring
new businesses in, and they wanted to present additional face. So
they actually tax themselves to form a CID.
Mr. BOOZMAN. Ms. Poticha, did I get that right?
Ms. POTICHA. Poticha.
Mr. BOOZMAN. Good.
Ms. POTICHA. Yes. Thanks.
Mr. BOOZMAN. I am Boozman, Bozeman, whatever.
[Laughter.]
Ms. POTICHA. I can relate.
Mr. BOOZMAN. Reconnecting America, has it looked at better
ways to estimate and incorporate the New Starts evaluation process pedestrian use of transit? You touched on that earlier, I think,
about pedestrian being important, to get there so you can get on
thecan you kind of elaborate on that a little bit?
Ms. POTICHA. Well, we have a database of every fixed transit station in the United States and we are able to pull data on how people get around in the neighborhoods that touch the transit stations,
and what we have done is that people who live in areas within a
half mile of a transit stop walk, bike, and take transit four times
as much as their peers in the region.
I think one of the challenges in the way that transit projects are
evaluated now is that the measurement of those pedestrians is
often lost in the computer modeling, and, in fact, although I am not
a modeling expert, I have heard from many of the academics and
practitioners that the current models that generate ridership are
not sensitive to pedestrians and dont fully measure those.
That is part of the reason why we have been doing research on
the tracking of projected ridership that is being generated through
this FTA computer model and actual ridership, and what we are
finding is that in many, many cases the ridership exceeds or is far
accelerated beyond what is estimated by the computer model. I
think much of this may be coming from this wave of transit-oriented development that has happened in the last 10 years around
many, many transit stations in the United States, creating this
whole market for neighborhoods where people can walk to transit,
walk to services. And, yet, I think in many ways that is not being
captured very well by the current system.
Mr. BOOZMAN. Well, thank you all very much. I appreciate it.
This is so important. You know, we talk about economic development; we talk about the benefit of reducing emissions, all of the
things that we are concerned about, but also it really is important
for single moms and single dads who dont have the resources to
commute. If you cant do that, you cant have a job, and then also
for our seniors. You know, many of them are able to continue to
live in their homes because they can get out and shop and do the
things that they need to do with just a little bit of help of transportation.
So, again, thank you all very much.

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40
Ms. HIRONO. I have a few more questions.
Some of you may be aware, possibly not, that Honolulu is one of
the New Starts cities, and I know that, in working with the mayor
there on obtaining Federal funding, that it is certainly not just a
question of cost-effectiveness, but there is a lot of discussion around
how can we revitalize those areas that the transit stops will be in
and economic development. Those are very real issues just because
FTA may not have quite the models that they feel are reliable.
I have a question for Ms. Poticha. FTA has argued that it is too
difficult and costly to separate land use from economic development
factors and is, thus, proposing a single combined measure of effectiveness. What are your thoughts about this approach?
Ms. POTICHA. Well, I have been an urban planner for about 25
years, and a vast majority of my career has been around working
with communities who are trying to build communities around
transit. It is very important for communities to plan the kinds of
land uses that happen around transit to change their zoning codes
so that mixed use walkable neighborhoods can actually be built. In
many places, as these transit lines come in, the rules dont allow
those kinds of neighborhoods to be built and so there is an effort
that needs to be done to prepare the land use policies to even allow
these neighborhoods to be possible.
But that is not sufficient, in my opinion, to generate the kinds
of neighborhoods that truly capture the value that transit provides,
and what we are seeing is the most successful places are places
that have put in place financial tools that help support and
incentivize development to come to these areas; that create the
sites where development can actually happen. In many of these
places you are running your transit line through an existing community. You might have a zoning that allows transit-oriented uses,
but that is often prevented because the land maybe hasnt been assembled in any real way.
So there are a whole set of tools that can be used to work with
the private sector to ensure that economic development happens
and that this kind of glomeration and clustering of uses and activity truly takes place. So I would say that they are related, but they
are different, and both are necessary in order to truly maximize the
publics investment in this transportation infrastructure.
Ms. HIRONO. So would you agree that FTA is perhaps jumping
the gun in trying to codify certain percentages that does not give
the kind of weight that some of us would like to give to those other
factors?
Ms. POTICHA. Well, I have heard a lot about the challenges of
creating a predictive computer model that would generate an estimate of economic development benefits from a particular transit investment, and I had always thought that the most appropriate way
to evaluate transit projects was a combination of predictive models
and some qualitative measures, because communities are very complex places. And as we are now learning when we look at these ridership models, they are not necessarily accurate.
So I wouldone of the things that we found through all of our
research and commissioning papers from various academics and
practitioners who work with economic development on a regular

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basis is that probably the best way to look at economic development is a combination of qualitative and quantitative metrics.
Ms. HIRONO. That sounds like a yes answer to me. Yes. Thank
you.
Ms. POTICHA. Well, I would also say that we looked at some of
the full funding grant agreements that have been made since 2000,
and one of the things that is a worry to me is that there are 14
projects on this listwhich I can submit to youthat received either a low or a medium-low cost-effectiveness rating through the
FTAs evaluation process. And yet, when land use, which was one
of the factors, was included into the evaluation, they rose up high
enough in order to get funding.
So, clearly, there is a recognition of the benefits of these other
factors, and I would say that we should continue to do that and improve upon it.
Ms. HIRONO. Thank you. And I would like you to submit the 14
projects.
Ms. POTICHA. I would be happy to.
Ms. HIRONO. If there are no further questions, thank you. This
hearing is adjourned. I would like to thank once again all of the
panelists for giving us the benefit of your views.
[Whereupon, at 1:12 p.m., the Subcommittee was adjourned.]

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