There is more to the good news that President Joe Biden signed into law the $1.2 trillion Bipartisan Infrastructure Deal. Consider what transit agencies will need to do when attempting to secure a Capital Investment Grant New Starts or Core Capacity Federal Transit Administration (FTA) Full Funding Grant Agreement. The first action to support development of any potential capital transportation improvement project is to identify the funding for a planning study. This is just the first step to support development of any potential capital transportation improvement project. Your state or Metropolitan Planning Organization, under the Federal Transit Administration Metropolitan & Statewide Planning and Non Metropolitan Transportation Planning 5303, 5304 and 5305 is a recipient of millions in annual planning dollars. Some of these funds could be programmed to pay for your feasibility study. You could also use your Section 5307 Urban Formula funding to cover the cost. It might require several years between obtaining funding under an approved grant, developing a scope of work, advertising and awarding a contract followed by a consultant to start and complete the study.
In too many cases, there needs to be resolution of a number of other issues including completion of environmental reviews, design, engineering, easement rights, business relocation, land acquisition, agreements with owners of underground utilities including water, sewer, gas, electric, steam and cable before being ready. It could take years to commence construction. The scope of work might also include construction of tracks, sidings, signals, power, power substations, stations, commuter parking, land acquisition, business relocations, utility, water or sewer relocation agreements and local feeder bus services. There may be a need to purchase additional rolling stock and modifications to existing or construction of new rail yards for maintenance and storage of equipment.
You never know a project's final cost until there are change orders due to unforeseen site conditions or a last minute change in scope, completion of inspection and acceptance for all work to insure it conforms to contract specifications, receipt of maintenance manuals for all project components, release of retain age and final payment to the contractors. Cost estimates would have to be refined as progress proceeds beyond the planning and environmental phases into real and final design efforts.
History has shown that estimated costs for construction usually trend upwards as projects mature toward 100 percent final design. Progression of final design refines the detailed scope of work necessary to support construction. The anticipated final potential cost would never be known until completion. Costs would be further refined by award of construction contracts and change orders to the base contracts during the course of construction. This will be followed by beneficial use, completion of inspection, acceptance and contract punch list items, receipt of asset maintenance plans, followed by release of retain age and final payment to the contractor(s).
Your transit agency could attempt to qualify this project for the FTA capital funding under various programs. This could include funds from Urbanized Formula 5307, State of Good Repair 5337 or Federal Highway Administration CMAQ (Flexible Congestion Mitigation Air Quality) or other FHWA programs. (These funds can be transferred to the FTA for funding transit projects.) There are other new FTA programs under the Bipartisan Infrastructure Deal whose details and requirements will be spelled out in future FTA Federal Register Notices over coming weeks and months.
Another option is requesting permission to enter this project into the FTA national competitive Capital Investment Grants (CIG) 5309 New Starts or Core Capacity programs. There will be up to $23 billion available between 2022 and 2026. Of this amount, $8 billion will be available specifically dedicated to new high capacity transit projects. The most recent Federal Transit Administration Capital Investment Grant Program report was issued in March 2021 for Federal Fiscal Year 2021 (October 1, 2020 - September 30, 2021). Is your transit agency project included? If not, you are not in it to win it. The next CIG report should be issued on or before March 2022. If your transit agency project is still not included, there is still much work to be done before you are in it to win it.
The initial approval under the FTA CIG Program for your transit agency's proposed project is permission to enter the “project development” phase. This would represent only the first step. This is a three-step process. Step one is to obtain permission from the FTA for entry into either the New Starts or Core Capacity programs. This would include completion of the federal environmental review process (NEPA) resulting in the FTA issuing a finding. FTA will determine if the project will require a more detailed full blown Environmental Impact Statement (EIS), versus a simpler Environmental Assessment (EA). This could easily require one to two years. There would also have to be an agreement between the FTA and your transit agency for budget and scope of work for the overall project. The second step would be obtaining FTA permission to enter and complete final design and engineering. This would require one to two years. The third step would be negotiating an FTA Full Funding Grant Agreement for the project. This would include a final project scope, budget, schedule, project management plan and fleet management plan.
The scope of work might also include construction of/or improvements to existing tracks, sidings, signals, power, power substations, sidings, stations, commuter parking, land acquisition, business relocations, utility, water or sewer relocation agreements, local feeder bus services and operating agreements with other freight and transit operators. It may be required to purchase additional rolling stock and modifications to existing or construction of new rail yards for maintenance and storage of equipment.
Another requirement is a positive cost benefit analysis. A financial plan would have to be developed. This could include identifying local match against any future FTA planning or capital grants to support advancement of the project. Your transit agency would also have to ensure that they have adequate local operating assistance dollars to cover farebox revenue shortfalls. Riders only pay for a portion of the cost for any trip. Your transit agency would also need to have the resources to maintain all the capital investments financed by the FTA. All federally funded capital project investments have useful life requirements. They are usually based on industry standards. This would serve as documentation that these new transportation assets will stay in service for the intended useful life. The third step might require between one to two years.
The FTA in offering your transit agency a Full Funding Grant Agreement would cap the level of federal participation for the project. In addition to providing local match against federal dollars, Your transit agency would be responsible to pay for any cost overruns above and beyond the agreed upon FFGA project cost. Based upon my personal experience from working for the FTA on similar projects, the process from start to finish for construction after receipt of the FFGA could easily require between five to ten years depending upon the complexity of the project before your investment reaches beneficial use and available to riders.
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Larry Penner is a transportation advocate, historian and writer who previously worked for the Federal Transit Administration Region 2 New York Office. This included the development, review, approval and oversight for billions in capital projects and programs for the MTA, NYC Transit, Long Island Rail Road, Metro North Rail Road MTA Bus, New Jersey Transit along with 30 other transit agencies in NY & NJ).
