FTA Publishes Guidance on Joint Development

Earlier this week, on August 25, 2014, the Federal Transit Administration (“FTA”) published Circular 7050.1, providing much anticipated guidance for grantees interested in pursuing joint development projects within FTA’s legal and regulatory framework.  The circular incorporates joint-development related provisions from MAP-21, and is intended to clarify FTA’s policy and serve as its single guidance document on the subject. 

Specifically, the circular: (1) defines the term “joint development”; (2) explains how a joint development project can qualify for FTA assistance; (3) describes the legal requirements that apply to the acquisition, use, and disposition of real property previously acquired with FTA assistance (“FTA-assisted real property”); (4) outlines the most common crosscutting federal requirements that apply to joint development projects; and (5) describes FTA’s process for reviewing and analyzing joint development proposals.

For more information on joint development within the FTA framework or to view the new circular, click here.

To read our E-Alert on this topic, click here.

FTA Offers More Insight on Evaluating New and Small Starts Projects

Today the Federal Transit Administration published final policy guidance to augment its New and Small Starts Program final rule published earlier this year.  The final rule established how the Federal Transit Administration evaluates new major transit projects that seek assistance under these funding programs authorized by Section 5309 of Title 49, U.S. Code.  The final rule does not address changes made by the MAP-21 legislation signed last July, rather it addresses parts of the program left unchanged by the 2012 legislation.

The New and Small Starts programs were developed as the Federal Transit Administration’s primary grant programs to fund major transit capital investments, such as rail, bus rapid transit, and ferries.  The final rule and its appendix created the framework for the New and Small Starts project evaluation process, while the final policy guidance supports the framework by providing additional insight into the process. 

The guidance issued today describes the methods for calculating both the financing commitment criteria and project justification criteria required for New Starts and Small Starts projects.  Project justification criteria include: mobility improvements, environmental benefits, congestion relief, economic development effects, land use and cost-effectiveness.  Meanwhile, financing commitment criteria includes: availability of reasonable contingency amounts, availability of stable and dependable capital and operating funding sources, and availability of local resources to recapitalize, maintain and operate the overall public transportation system.  Both the final rule and the final policy guidance are available on the Federal Transit Administration website.

Update Regarding Buy America and Utility Relocations

As we have previously reported,  the Federal Highway Administration (FHWA) and Federal Transit Administration (FTA) recently adopted policies requiring Buy America compliance for utility relocations for federally funded transportation projects in cases where the utility performs relocation work.  On June 28, 2013, the American Association of State Highway and Transportation Officials (AASHTO), American Public Transportation Association (APTA), streetcar project sponsors, and associations representing electric, gas and broadband utilities sent a joint letter to the United States Department of Transportation (USDOT) asking for certain accommodations in implementation of the new policy.  The letter, addressed to Transportation Secretary Ray LaHood and Secretary-Designate Anthony Foxx, asks USDOT to clarify how the requirements will be applied, requests a transition period before Buy America requirements are applied to materials supplied by utility owners, and asks for USDOT to consider issuance of waivers for specialized utility products that may not be available from US manufacturers.  The letter also notes the importance of consistency in applying the Buy America requirements throughout the country, and cites a need for training and education of utility owners, suppliers and manufacturers.

The full letter can be found on APTA’s website.

On a related topic, FHWA has received a request for a waiver of Buy America requirements for various components related to the relocation of Pacific Gas and Electric's natural gas service facilities for a California project.  FHWA has requested comments regarding the waiver request.  View the request on FHWA's website.

Thanks to Frank Liu for his assistance with this entry.

President's Budget Includes Funding For Two LACMTA Projects

Possibly lost in the shuffle of the rollout last week is the news that the President’s budget proposal (PDF) includes $130 million to help fund two significant transit system improvements in Los Angeles, the Regional Connector and the West Side Extension.

The Regional Connector would be a 1.9-mile underground line that would tie together the Gold, Blue and Expo lines and allow a one-seat ride from Montclair to Long Beach and from East Los Angeles to Santa Monica.  The West Side Extension would build out the Purple Line subway from Wilshire & Western to Westwood, a distance of 9.5 miles.

Both projects were slated for Full Funding Grant Agreements in the Federal Transit Administration’s FY 2014 New Starts Report (PDF).  Metro has identified these two projects as its priority projects.

Only one other project, the Columbia River Crossing, a bridge project with an FTA-supported transit component, was included in the President’s budget proposal and recommended for a FFGA in the New Starts Report.  The Columbia River Bridge Project is co-sponsored by the Oregon and Washington Departments of Transportation.

FHWA and FTA Issue Guidance on MAP-21 to Streamline Environmental Process

On January 14, 2013, the Federal Highway Administration (FHWA) and Federal Transit Administration (FTA) issued guidance on Section 1319 of the Moving Ahead for Progress in the 21st Century Act (MAP-21), Pub. L. 112-141, July 6, 2012.  MAP-21 is a measure that reauthorizes transportation funding through the end of 2014, and is the product of a robust effort by transportation advocates to streamline the lengthy, complex, and cumbersome federal environmental process.  As we reported here, MAP-21 includes several meaningful reforms that could expedite the National Environmental Policy Act (NEPA) process, thereby accelerating project delivery. 

Section 1319 attempts to expedite project delivery by providing a process by which agencies will begin to consolidate their NEPA documents.  Specifically, Section 1319 authorizes (1) the use of errata sheets attached to a draft EIS (DEIS) in lieu of the traditional final EIS (FEIS), and (2) the use of a combined FEIS and Record of Decision (ROD).  While the guidance provides details for transportation agencies regarding how to prepare and process these consolidated documents, it indicates that these devices are not likely to be applicable to controversial projects or where there are unresolved inter-agency disagreements. 

Use of Errata Sheets in Lieu of FEIS.  Pursuant to Section 1319(a), agencies may attach errata sheets to a draft EIS, in lieu of preparing a traditional FEIS.  The guidance indicates that errata sheets should only be used if the lead agency has modified the DEIS “in response to comments that are minor and are confined to factual corrections or explanations of why the comments do not warrant additional agency response.”  The errata sheets should also include the information required in a FEIS, as set forth in applicable regulations. 

Use of a Combined FEIS and ROD.  Section 1319(b) directs agencies to prepare a combined FEIS and ROD “to the maximum extent practicable.”  The guidance indicates that a combined FEIS/ROD should not be prepared if the FEIS makes substantial changes to the proposed action that are relevant to environmental or safety concerns, or there are significant new circumstances or information relevant to environmental concerns that impact the proposed action.  The guidance includes factors that an agency should consider when deciding whether a joint FEIS/ROD is appropriate, including whether the proposed action involves a substantial degree of controversy or whether there are unresolved inter-agency disagreements regarding the proposed action.  Any combined FEIS/ROD should also meet the requirements of applicable regulations. 

Prior to MAP-21, NEPA regulations prohibited agencies from approving a ROD any sooner than 30 days after the notice of availability of an FEIS.  Combining these processes, as well as encouraging the use of errata sheets to prepare an FEIS, may streamline and expedite the environmental review process for some projects.  The guidance suggests, however, that the use of these streamlining devices may not be appropriate for controversial projects or where there are unresolved inter-agency disagreements. 

The Section 1319 guidance was issued on an interim basis.  At a later date, FHWA and FTA will conduct a formal rulemaking to propose revisions to the FHWA/FTA NEPA regulations (23 C.F.R. Part 771) to reflect the changes made as a result of MAP-21.

Federal Transit Administration Executes $1.5 Billion Grant Agreement for Honolulu Rail Project

On December 19, 2012 the Federal Transit Administration executed a $1.5 billion Full Funding Grant Agreement for $ 5 billion, 20-mile, Honolulu rail transit project.  The Project will serve the heavily congested corridor between the west side of O'ahu and downtown Honolulu.  The Project will provide transit access to major employment centers, activity centers, and tourist destinations in Honolulu, including the Pearl Harbor Naval Base, Aloha Stadium, the Honolulu International Airport, Chinatown, the downtown business center, the Civic Center, the Port of Honolulu, and the Ala Moana Center.

At the signing ceremony in Washington, D.C., U.S. Transportation Secretary LaHood noted that "The Honolulu rail transit project, the first of its kind in the state, will bring new transit options to the growing region and create a modern transportation system that is built to last for future generations". Secretary LaHood noted the recent passing of Senator Daniel Inouye:  "And though, sadly, Senator Inouye cannot be here with us today, this agreement is a testament to his tireless advocacy on behalf of his state and its people."

FTA Adminstrator Rogoff commented that "Hawaii's first rail transit system will be a game-changer for the region because it will serve nearly 80 percent of Oahu's total population, including thousands of workers who commute into Honolulu every day from West Oahu," said Administrator Rogoff. "This historic project will cut commute times west of the city by more than 30 minutes each way, drastically improving the quality of life for residents who want to spend less time in their cars, more time with their families, and enjoy cleaner air."

The FTA funding commitment represents approximately 35 percent of the Project’s construction cost.  Local revenues will provide about 65 percent of the Project cost.

The Project is the subject of pending environmental litigation under state and federal law.  Nossaman is special counsel to the City in the federal litigation.

Transit P3s On Track

Two potential public-private partnership transit projects appear closer to leaving the station, after several delays. Denver Regional Transportation District (RTD) recently held a public hearing on the Eagle P3 project and is poised to issue a request for proposals to three prequalified/shortlisted teams on September 30th with proposals anticipated in March 2010. Bay Area Rapid Transit (BART) is on an accelerated schedule for its stimulus-revamped Oakland Airport Connector project, with proposals due in late September and contract award slated for December.

The Federal Transit Administration selected both projects to participate in the Public-Private Partnership Pilot Program or Penta P, a program authorized by SAFETEA-LU to demonstrate the pros and cons of P3s for certain new FTA-funded fixed guideway capital projects. FTA officially launched the program in January 2007, focusing on projects that utilize procurement methods that integrate risk-sharing and accelerate project delivery.

FTA recognized the inherent obstacles in transit P3s in its 2007 “Report to Congress on the Costs, Benefits, and Efficiencies of Public-Private Partnerships for Fixed Guideway Capital Projects,” emphasizing that private partners for transit projects have been reluctant to provide long-term equity investment or assume ridership or revenue risk. Overcoming the challenges to private sector equity investment and assumption of revenue risk for transit projects will be a gradual process, even with Penta P support. Denver’s Eagle P3 project, to be delivered as an availability payment concession, calls for the concessionaire to finance the project, although the RTD will assume the farebox risk. While BART’s initial plans for the Oakland Airport Connector called for the private sector to provide financing and share in the farebox risk, BART has since switched gears; the contractor will now design, build, operate and maintain the project, but BART will fund the project itself, using a combination of traditional funding sources and an injection of stimulus funds.

FTA Considering New Safety Oversight for Rail Transit

New subway safety standards may be coming soon to a city near you.  The Federal Transit Administration (FTA) has assembled a team of transportation safety experts to explore rail transit (subway, light rail, and commuter rail) safety reforms, which may extend to bus operations.   

FTA is currently prohibited by law from establishing national safety standards, requiring Federal inspections, or requiring specific operating practices, but that may soon change.  In testimony before the Senate Banking Committee, FTA Administrator Peter Rogoff condemned several recent transit collisions as “unacceptable” and announced the Obama Administration’s intent to pursue reform. 

Most rail transit is free from federal safety oversight. There are exceptions - certain commuter rail systems are funded by FTA but regulated by the Federal Railroad Administration safety regulations.  But the majority of urban rail transit systems are overseen by the State safety oversight agencies. 

Any new safety oversight requirements will probably be tied to FTA’s traditional role as a grant-making agency. Administrator Rogoff highlighted the need for new transit funding, citing a National Transportation Safety Board  preliminary report indicating that the “condition of equipment and age of the rolling stock may have resulted” in the Washington D.C. crash earlier this year, which killed 9 and injured more than 70 passengers.

Aging equipment is a serious concern nationwide.  FTA’s recent rail modernization study surveyed the seven largest transit operators, which carry more than 80% of the nation’s transit passengers.  More than 33% of the assets held in these systems were in marginal condition or had already exceeded their useful life.  Servicing this system’s backlog of unmet needs would cost a staggering $50 billion, by the study’s estimates.

As the new surface transportation authorization process gets underway the Administration’s plans will no doubt provide fodder for vigorous debate.  Administrator Rogoff’s testimony seems to hint that new safety measures may be linked to FTA’s discretionary New Starts program.  In the meantime, look forward to a follow-on FTA study identifying safety critical infrastructure and industry wide “state of good repair” needs.  

Video of the hearing "Rail Modernization: Getting Transit Funding Back on Track," along with written statements from the heads of the Chicago Transit Authority, the Washington Metropolitan Transit Authority, New Jersey Transit, and the Metropolitan Atlanta Rapid Transit Authority are available from the Senate Banking Committee's website.