Consistent Valuation Process Can Improve Performance of Federal New Starts Funding Program for Major Transportation Projects

Recommendations Detailed in Research Report From Urban Transportation Center at UIC

CHICAGO (August 2017) Establishment of consistent guidelines to evaluate the merits of federally-funded transportation projects considered under the New Starts program could create best practices that will lead to a more streamlined selection process and demonstrate greater government transparency.

This summary encapsulates the findings of a study undertaken to analyze the decision-making process for allocating federal dollars to help fund rail, bus, streetcar and rapid transit projects that are part of long-range local or regional plans.

A research team from the Urban Transportation Center at UIC conducted interviews with representatives from seven transportation agencies and metropolitan planning organizations to gain insight into how transit capital projects were reviewed and prioritized before a request got submitted for New Starts funding.

Capital Improvement Grants (CIG) administered and overseen by the Federal Transit Administration are allocated through the New Starts program. Currently, more than 70 projects nationwide are funded in part through the GIC program.

Researchers worked to identify potential best practices from the feedback given by the local transportation officials and through additional study of the history behind New Starts/CIG to present recommendations for a more effective and transparent application process.

As noted in the report, “A Review of Capital Improvement Grant Program and the Need for a Uniform Project Selection Process,” the New Starts selection process criteria differed within regions of the nation over time.

“From the interviews and the literature study, it has been identified that there is no explanation detailed for this local selection process and uniformity at the MPO level. The study interviews explain that some of the MPOs are still unclear with the FTA’s rule and their own selection process and as a result end up in a seemingly arbitrary and non-transparent selection process,” the report stated.

The report cites four issues and barriers within the current New Starts valuation process:

  1. A lack of balance between the valuation process and user experience.
  2. An unsatisfactory process to capture alternative benefits.
  3. Too long between development and evaluation.
  4. An absence of alternative funding programs.

Suggestions to remedy these challenges include these alternative evaluation methodologies: Data envelopment analysis, principal component analysis and cost benefit analysis.

The research team recommended the valuation process needed to establish a uniform and fair funding selection method be consistent across all states and adhere to these methods:

  • Tailor the evaluation process to project risks.
  • Consider greater use of letters of intent.
  • Employ early systems work agreements and establish consistent comprehensive project schedules that are enforced nationwide.

Visit this page to read an abstract of the New Starts report project, or download the complete report.

The project was coordinated by UTC Director Dr. P.S. Sriraj.   He was supported by graduate researchers Jordan Snow, Jenny Kane, Jane Wilberding and Divyanga Ganesh.

The Urban Transportation Center at UIC is dedicated to conducting research and education and providing technical assistance on urban transportation planning, policy, operations, and management. The UTC is part of the College of Urban Planning and Public Affairs, a nationally-recognized innovator in education, research, and engagement in support of the nation’s cities and metropolitan areas. Learn more by visiting www.utc.uic.edu.