[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]
EXAMINING THE CURRENT AND FUTURE DEMANDS ON THE FEDERAL TRANSIT
ADMINISTRATION'S CAPITAL INVESTMENT GRANTS
=======================================================================
(113-45)
HEARING
BEFORE THE
SUBCOMMITTEE ON
HIGHWAYS AND TRANSIT
OF THE
COMMITTEE ON
TRANSPORTATION AND INFRASTRUCTURE
HOUSE OF REPRESENTATIVES
ONE HUNDRED THIRTEENTH CONGRESS
FIRST SESSION
__________
DECEMBER 11, 2013
__________
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COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE
BILL SHUSTER, Pennsylvania, Chairman
DON YOUNG, Alaska NICK J. RAHALL, II, West Virginia
THOMAS E. PETRI, Wisconsin PETER A. DeFAZIO, Oregon
HOWARD COBLE, North Carolina ELEANOR HOLMES NORTON, District of
JOHN J. DUNCAN, Jr., Tennessee, Columbia
Vice Chair JERROLD NADLER, New York
JOHN L. MICA, Florida CORRINE BROWN, Florida
FRANK A. LoBIONDO, New Jersey EDDIE BERNICE JOHNSON, Texas
GARY G. MILLER, California ELIJAH E. CUMMINGS, Maryland
SAM GRAVES, Missouri RICK LARSEN, Washington
SHELLEY MOORE CAPITO, West Virginia MICHAEL E. CAPUANO, Massachusetts
CANDICE S. MILLER, Michigan TIMOTHY H. BISHOP, New York
DUNCAN HUNTER, California MICHAEL H. MICHAUD, Maine
ERIC A. ``RICK'' CRAWFORD, Arkansas GRACE F. NAPOLITANO, California
LOU BARLETTA, Pennsylvania DANIEL LIPINSKI, Illinois
BLAKE FARENTHOLD, Texas TIMOTHY J. WALZ, Minnesota
LARRY BUCSHON, Indiana STEVE COHEN, Tennessee
BOB GIBBS, Ohio ALBIO SIRES, New Jersey
PATRICK MEEHAN, Pennsylvania DONNA F. EDWARDS, Maryland
RICHARD L. HANNA, New York JOHN GARAMENDI, California
DANIEL WEBSTER, Florida ANDRE CARSON, Indiana
STEVE SOUTHERLAND, II, Florida JANICE HAHN, California
JEFF DENHAM, California RICHARD M. NOLAN, Minnesota
REID J. RIBBLE, Wisconsin ANN KIRKPATRICK, Arizona
THOMAS MASSIE, Kentucky DINA TITUS, Nevada
STEVE DAINES, Montana SEAN PATRICK MALONEY, New York
TOM RICE, South Carolina ELIZABETH H. ESTY, Connecticut
MARKWAYNE MULLIN, Oklahoma LOIS FRANKEL, Florida
ROGER WILLIAMS, Texas CHERI BUSTOS, Illinois
TREY RADEL, Florida
MARK MEADOWS, North Carolina
SCOTT PERRY, Pennsylvania
RODNEY DAVIS, Illinois
MARK SANFORD, South Carolina
(ii)
Subcommittee on Highways and Transit
THOMAS E. PETRI, Wisconsin, Chairman
DON YOUNG, Alaska ELEANOR HOLMES NORTON, District of
HOWARD COBLE, North Carolina Columbia
JOHN J. DUNCAN, Jr., Tennessee PETER A. DeFAZIO, Oregon
JOHN L. MICA, Florida JERROLD NADLER, New York
FRANK A. LoBIONDO, New Jersey EDDIE BERNICE JOHNSON, Texas
GARY G. MILLER, California MICHAEL E. CAPUANO, Massachusetts
SAM GRAVES, Missouri MICHAEL H. MICHAUD, Maine
SHELLEY MOORE CAPITO, West Virginia GRACE F. NAPOLITANO, California
DUNCAN HUNTER, California TIMOTHY J. WALZ, Minnesota
ERIC A. ``RICK'' CRAWFORD, Arkansas STEVE COHEN, Tennessee
LOU BARLETTA, Pennsylvania ALBIO SIRES, New Jersey
BLAKE FARENTHOLD, Texas DONNA F. EDWARDS, Maryland
LARRY BUCSHON, Indiana JANICE HAHN, California
BOB GIBBS, Ohio RICHARD M. NOLAN, Minnesota
RICHARD L. HANNA, New York ANN KIRKPATRICK, Arizona
STEVE SOUTHERLAND, II, Florida DINA TITUS, Nevada
REID J. RIBBLE, Wisconsin, Vice SEAN PATRICK MALONEY, New York
Chair ELIZABETH H. ESTY, Connecticut
STEVE DAINES, Montana LOIS FRANKEL, Florida
TOM RICE, South Carolina CHERI BUSTOS, Illinois
MARKWAYNE MULLIN, Oklahoma NICK J. RAHALL, II, West Virginia
ROGER WILLIAMS, Texas (Ex Officio)
SCOTT PERRY, Pennsylvania
RODNEY DAVIS, Illinois
BILL SHUSTER, Pennsylvania (Ex
Officio)
(iii)
CONTENTS
Page
Summary of Subject Matter........................................ vi
TESTIMONY
Hon. Peter M. Rogoff, Administrator, Federal Transit
Administration................................................. 5
Hon. Gregory H. Hughes, Chairman, Board of Trustees, Utah Transit
Authority...................................................... 5
Forrest Claypool, President, Chicago Transit Authority........... 5
Hon. Christopher B. Coleman, Mayor, City of St. Paul, Minnesota.. 5
Randal O'Toole, Senior Fellow, Cato Institute.................... 5
PREPARED STATEMENTS SUBMITTED BY WITNESSES
Hon. Peter M. Rogoff............................................. 32
Hon. Gregory H. Hughes........................................... 43
Forrest Claypool................................................. 50
Hon. Christopher B. Coleman...................................... 59
Randal O'Toole................................................... 63
SUBMISSION FOR THE RECORD
Hon. Peter M. Rogoff, Administrator, Federal Transit
Administration, responses to questions for the record from the
following Representatives:
Hon. Eddie Bernice Johnson, of Texas......................... 40
Hon. Dina Titus, of Nevada................................... 42
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
EXAMINING THE CURRENT AND FUTURE
DEMANDS ON THE
FEDERAL TRANSIT ADMINISTRATION'S
CAPITAL INVESTMENT GRANTS
----------
WEDNESDAY, DECEMBER 11, 2013
House of Representatives,
Subcommittee on Highways and Transit,
Committee on Transportation and Infrastructure,
Washington, DC.
The subcommittee met, pursuant to call, at 2 p.m., in Room
2167, Rayburn House Office Building, Hon. Thomas E. Petri
(Chairman of the subcommittee) presiding.
Mr. Petri. The subcommittee will come to order. We will be
joined shortly by the ranking Democrat for the day, Ms.
Napolitano. We are under some time pressure because we are
expecting an hour of votes starting shortly before 3 o'clock.
Today's hearing will focus on the Federal Transit
Administration's Capital Investment Grant program, commonly
known as New Starts. Federal public transportation programs
have traditionally provided financial support for capital costs
and limited operating expenses to local transit agencies around
the country. These programs complement our investment in
highway and bridges in order to support an integrated national
surface transportation network.
MAP-21 reauthorized Federal public transit programs for 2
years and provided $10.5 billion in annual funding. The
majority of Federal transit dollars are funded out of the Mass
Transit Account of the Highway Trust Fund. Of the 18.4 cents
per gallon collected in Federal gasoline taxes, 2.86 cents are
deposited in the Mass Transit Account for these purposes.
In addition, approximately 20 percent of the Federal
transit programs are funded from the general fund. The largest
of these programs is New Starts. MAP-21 authorized $1.9 billion
in each budget year, 2013 and 2014, for the program. New Starts
is a discretionary grant program that has clear justification
criterion and a transparent project selection process. Projects
that are selected for funding must have a strong local
financial commitment and achieve sufficient ratings in the
justification factors, such as cost-effectiveness and the
potential for economic development.
Projects currently funded through the New Starts program
vary widely across types, regions, and costs. For example, on
the high end, the New Starts program is currently contributing
$1.5 billion toward a $5 billion transit program in Honolulu.
Two multibillion-dollar projects in New York City are also
being funded. On the smaller end, the program also funds what
is known as Small Starts projects. Small Starts must cost less
than $250 million total and have a maximum Federal share of $75
million. Current Small Starts projects include a bus rapid
transit project in Grand Rapids, Michigan, and a light rail
expansion in Mesa, Arizona.
The program originally was intended and designed to support
new systems or new extensions to existing systems, but MAP-21
significantly expanded New Starts eligibility. Projects that
would expand the capacity of an existing corridor by at least
10 percent are now eligible for New Starts funding.
In November, FTA approved the first Core Capacity project
to enter into project development, a $4.7 billion proposal to
modernize the red and purple lines in Chicago. With the
expanded eligibilities, one could see a potential situation in
which a handful of expensive projects in large urban areas
could monopolize the New Starts funding over several years.
This could come at the expense of funding opportunities for new
public transit systems in the rest of the country. We must
ensure that Federal investment in public transportation
projects through this program is appropriately targeted,
equitable, and cost-effective.
Today's hearing will focus on the changes MAP-21 made to
the New Starts program. We will also examine how those changes
are impacting current and future funding demands. The
subcommittee will receive testimony from Peter Rogoff,
Administrator of the Federal Transit Administration, who is
responsible for implementing the New Starts program. In
addition, we will hear from officials from the Utah Transit
Authority and the Chicago Transit Authority, the mayor of St.
Paul, Minnesota, and a representative of the Cato Institute.
Before I recognize representative Napolitano, I would like
to recognize Mr. Crawford for a unanimous consent request.
Mr. Crawford. Thank you Mr. Chairman. I request unanimous
consent that the chairman be permitted to declare a recess
during today's hearing.
Mr. Petri. I would also like to ask unanimous consent that
Representative Daniel Lipinski be permitted to join the
subcommittee for today's hearing. Without objection, so
ordered.
I now yield to Representative Napolitano for any opening
statement she may wish to make.
Mrs. Napolitano. Thank you, Mr. Chairman. First, let me
extend Ranking Member Norton's regrets she would not be able to
be here today. She is returning from South Africa as part of
the delegation to pay tribute to former South African President
Nelson Mandela.
But we thank you for holding this important hearing on
Federal investments in our Nation's transit infrastructure
through the FTA's New Starts program, and I am very pleased to
serve as ranking member as this program is of great importance
to not only the county of Los Angeles, but the State of
California, being a donor State.
The Gold Line on the East Side, which is an extension
program in our area, is one of the New Starts projects to be
completed in the county that was my former district of 2009,
received $490 million in Federal funding and leveraged an
additional $400 million in local funding. So that was a pretty
good match.
That extension created a 6-mile light rail into
historically Latino community of East Los Angeles. The vibrant
community now has easy transit to downtown L.A. and most parts
of the county and increased a lot of potential for economic
development. Also increased the ability for people to travel
and get congestion off the highways and be able to develop more
jobs and business opportunities.
The two New Starts projects in the proposals in L.A.
County--by the way, L.A. County is about 14 million people, the
L.A. city is about 4 million people. So you understand we need
mass transit. The county has two projects set to receive full
funding grant agreements from FTA in the near future, the
Regional Connector Light Rail Project and the Westside Subway
Extension, together estimated to provide over 100,000 average
weekly transit trips in their first year, and greatly, of
course, improve mobility and access, reduce travel time, help
the environment. And, of course, the Central Business Council
of Los Angeles is ecstatic about that.
The Regional Connector will allow constituents to be able
to connect the San Gabriel Valley, which is southeast of Los
Angeles, to the West Side of Los Angeles, which currently they
would not be able to access as easily, provide more speed and
efficiency for the constituents to commute around the region of
Los Angeles, reducing congestion and helping clean the
environment.
The Gold Line Foothill Extension, also we must recognize
and support transit projects that are being fully funded at the
local level, no Federal funds, local level, and it is being
constructed at a cost of $735 million with local funding, $11.5
million extension of the current rail line, and six new
stations in the San Gabriel Valley. Our local governments had
planned to further extend the line from one city, Azusa, to the
Ontario Airport, owned by the city of Los Angeles, and that
would create not only a lot of economic development in the
whole corridor, but also be able to expedite the people
traveling from outside L.A. County into the county, but that
phase is not fully funded.
Now, the large self-help regions like L.A. County must
receive additional support from the Federal Government for our
locally funded projects. These are just some of the examples of
the New Starts projects or programs, and all over the country
our Government is investing in public transportation, which
will undoubtedly improve the mobility of millions of Americans,
help to reduce traffic congestion, improve our air quality and
environment, and foster the development of economically viable
and livable communities, such as in one of your testimonies I
found very interesting and I commend you for that.
That program has for decades been the Federal Government's
primary instrument for supporting large-scale transit capital
investments--heavy rail, commuter rail, light rail, and bus
rapid transit. This was created, of course, in 1964 and has
made possible dozens of new transit systems and/or expansions
across our country. Continuing to make these investments is
critical to our economic viability and stability and the well-
being of our citizens.
This new program consists, of course, of rigorous
justification criteria and detailed FTA review, more than any
other category of Federal transportation funding, to ensure
only projects that will yield a certain level of benefit will
receive funding. This level of justification is not in regard
of any category of highway projects receiving Federal funds. In
fact, the chief complaint about New Starts is how lengthy and
cumbersome it is and can be to successfully navigate the
process and obtain a grant agreement because of this complex
review process.
Congress in its most recent surface transportation
authorization, MAP-21, addressed the concern by streamlining
and combining steps in the process to expedite grant approval.
Also added eligibility under this program for existing transit
systems that are operating at or over capacity or expect to be
in the next 5 years to upgrade their current network.
There is a great need for these projects, known as the Core
Capacity, and it is a testament to the growing transit
ridership across this country. Projects are most often thought
of as applicable to older, larger legacy transit systems in
cities such as Chicago, New York, Washington, DC, and, of
course, San Francisco, because of their age and condition.
In reality, any system can utilize this eligibility and I
suspect all systems will eventually have to. For example, if a
light rail system finds that growing popularity of its services
means needing to upgrade check from two- to three-car
platforms.
Unfortunately, some will call into question whether Core
Capacity projects should continue to be eligible given the
limited size of the New Starts funding. The program was
established to add transit capacity to this country, and in
this regard the program has accomplished this objective and
more, and done it in a very competitive and transparent manner.
Members of this committee must stand together to make sense for
continued robust funding of this very highly successful program
and in its much-needed areas.
Rather than quibbling over how we address capacity, we
should focus on ensuring FTA is using all of its tools
appropriately to identify the projects nationwide that add
transit capacity in the most beneficial way to transit riders
and communities. A well-funded system of competitively selected
projects, coupled with complete transparency over the process,
will ensure that all eligible and interested projects, those
that stand to produce the most results, become a reality with
our help.
Look forward to hearing from the witnesses and to learn
more about their progress implementing the MAP-21 and to hear
the sponsors of several successful New Starts projects across
the country. Thank you, Mr. Chair, and I yield back.
Mr. Petri. Thank you.
Let me again welcome our panel of witnesses today
consisting of the Honorable Peter M. Rogoff, Administrator of
the Federal Transit Administration; the Honorable Gregory H.
Hughes, chairman of the Board of Trustees of the Utah Transit
Authority; Forrest Claypool, who is president of the Chicago
Transit Authority; Mayor Chris Coleman from St. Paul; and Mr.
Randal O'Toole, who is a senior fellow with the Cato Institute,
who has spent years as a recognized expert in this area.
I thank you all for the effort that went into your prepared
statement and would invite you to summarize them for about 5
minutes of testimony, beginning with Mr. Rogoff.
TESTIMONY OF HON. PETER M. ROGOFF, ADMINISTRATOR, FEDERAL
TRANSIT ADMINISTRATION; HON. GREGORY H. HUGHES, CHAIRMAN, BOARD
OF TRUSTEES, UTAH TRANSIT AUTHORITY; FORREST CLAYPOOL,
PRESIDENT, CHICAGO TRANSIT AUTHORITY; HON. CHRISTOPHER B.
COLEMAN, MAYOR, CITY OF ST. PAUL, MINNESOTA; AND RANDAL
O'TOOLE, SENIOR FELLOW, CATO INSTITUTE
Mr. Rogoff. Thank you, Chairman Petri and Ms. Napolitano.
We very much appreciate the opportunity to highlight the
success of the Federal Transit Administration's New Starts
program. I also want to thank the committee for supporting our
efforts to strengthen the program through MAP-21.
Since its inception nearly four decades ago, New Starts has
become one of the Federal Government's most transformational
investment partnerships. The program has earned broad-based
support among Governors, mayors, local council leaders, and
millions of Americans across party lines in every region of the
country because they know what the program delivers.
To cite just a few examples, in Dallas, Texas, a city where
we were told that no one was going to get out of their pickup
trucks, citizens are now flocking to new light rail lines
extending throughout the city and its suburbs. In fact, Dallas
is now the largest operator of light rail service in North
America, and that service has unleashed billions of dollars in
new commercial and residential construction around the region.
In Utah, as I am sure Mr. Hughes will explain, Utah has now
completed 70 miles of new transit service in 7 years. The State
has more than doubled transit capacity as its population grows
more than twice as fast as other States. A few days ago I rode
commuter rail down to Provo and Orem from Salt Lake and saw
firsthand the huge number of jobs created there as companies
like Adobe, eBay and Nu Skin set up shop right near the
commuter rail stations. And in Arizona, the New Starts program
is helping to link downtown Phoenix with the suburbs of Tempe
and Mesa, generating new jobs and opportunities along the way.
In all, FTA has signed 120 full funding grant agreements
for New Starts and 20 grant agreements for Small Starts
projects. The Obama administration envisions the New Starts
program having an even bigger role in the years ahead.
The U.S. Census projects that we will add roughly 120
million people between now and 2060, expanding our population
by about one-third. The number of people 65 and older will more
than double over the next 50 years. Young people are driving
less and our cities are choking on congestion. These trends cry
out for a balanced approach to transportation, one that expands
our transportation networks in all directions, and the New
Starts program must be part of that solution.
At the FTA we have heeded Congress' call to streamline New
Starts and improve its efficiency. Our commonsense changes will
help local project sponsors shave at least 6 months off the
time that is now required to move major New Starts projects
from concept to construction. In some cases we will be able to
shorten the process even more.
FTA recently rolled out a new ridership forecasting tool
that we are very proud of that can save local project sponsors
as much as $1 million on fees and reduce certain planning
requirements from 2 years all the way down to 2 weeks. Over the
past decade, roughly 80 percent of our New Starts and Small
Starts projects were delivered on time and on budget. For the
projects we currently have under construction, that number is
likely to be closer to 90 percent.
Unfortunately, despite a very successful track record and
rising demand from all corners of the country, the New Starts
program is currently facing some very significant challenges.
The combination of the funding freeze contained in the
continuing resolution for 2013 and the sequester that followed
left funding for this program almost $400 million below the
level requested in the administration's budget. As a result,
for the first time in modern memory, FTA was unable to make new
funding commitments for any new projects through the New and
Small Starts program in its 2014 budget. And every project that
already had a signed funding agreement with the FTA received
less funding than the amount called for in that agreement,
resulting in increased financing and carrying costs on local
governments.
FTA now has more than 30 projects in the pipeline, projects
that together would add more than 320 new miles of transit
service to communities that need more robust transportation
choices. We also are working to increase capacity in rail
corridors that are already at or above capacity today through
the Core Capacity program, as Ms. Napolitano made mention of,
in cities like Chicago, New York and elsewhere. These Core
Capacity investments will enable systems that already provide
close to 4 billion trips a year to better serve the expanding
number of riders that they are experiencing.
The administration remains fully committed to the New
Starts program and to advancing many good projects through the
budget process. We are asking Congress to help us get it back
on track, to pay our bills, and build more of the good
transportation projects our Nation so desperately wants and
needs.
Mr. Chairman, this concludes my testimony. I will be happy
to answer any questions at the conclusion of the testimony.
Thank you.
Mr. Petri. Thank you.
Mr. Hughes.
Mr. Hughes. Thank you, Mr. Chairman, members of the
subcommittee. Thank you for the opportunity to speak to you. My
name is Greg Hughes. I am the chairman of the Utah Transit
Authority, which is our multijurisdictional, political
jurisdictional mass transit system. We serve probably 80
percent of the population of the State of Utah.
I wear a couple different hats. I am also a member of our
State legislature in the House. I am our majority whip and I
serve in that role. So I have a couple different areas of
responsibility and perspectives that I brought when I was asked
by the mayors in Salt Lake County to serve as a board member of
UTA.
I have to tell you that I grew up, by way of background, in
Pittsburgh, Pennsylvania, which is a much more densely
populated metropolitan area than the Salt Lake County area, and
as a conservative Republican my opinion of mass transit is it
seemed reasonable or a necessity in Pittsburgh, but certainly
in a State like Utah, maybe more of an oversubsidized social
service. So I warned the mayors that if I was going to serve on
this board, they might not like what I had to say or the
perspective I was going to share.
I think it was helpful for me as a member of our State
legislature to be on that board and lend the perspective of a
State that is fiscally conservative and always looking at that
bottom line, but I at the same time got some valuable
perspective as well as was able to understand a little bit
better in a State like Utah, where you see how quickly we are
growing, the absolute need we have to be multimodal.
And what I mean is that when I sat every year and had to
look at how many roads we had to help keep in good repair and
how much expansion we needed for the population that was
growing, I became agnostic in terms of mode. I didn't care any
longer whether someone was going to decide to get on a train or
a bus or a different mode, or whether they were going to get in
their car. In fact, I started to point out to stakeholders who
might not have thought of themselves as traditional
stakeholders to mass transit that if you like getting to work
on time, you love that 80 percent of the light rail commuters
along our new line own automobiles and would have been in your
way trying to get to work or to school.
What we find in the State of Utah is that we just have to
get people from point A to point B, and we have to find as many
ways to do it as possible. We have had an over billion-dollar
expansion of the interstate freeway in Utah County, one of the
fastest growing counties in the country. One of the $30 million
interchanges will hit congestion failure in 6 years. How do we
begin to pay for that as a State? We have to have multimodal,
we have to have other areas to allow people to commute.
The nice thing about rail as we have put in 140 miles in 15
years is that you can add capacity very quickly by adding a
car, another car for people to commute. That gives us more
options and why I have begun to see this under more of a more
general term and why, frankly, I think sometimes my
conservative colleagues and friends have not occupied the space
of being an advocate for transportation infrastructure.
I think that if you have Lincoln, who brought us the
intercontinental railroad, and President Eisenhower, who
brought the interstate, our transportation infrastructure and
being multimodal and getting people from point A to point B is
something that is very bipartisan. The roads, the rail, the
buses, these are not Republican or Democrat. This is an area
where our interests, our concerns, Utah is a valley and clean
air is certainly a concern as well.
There are many people that have different perspectives that
overlap when we talk about MAP-21 and how we get things done.
And I think that where we represent constituencies, the
constituents that I represent, as we find these areas of
agreement that exist in public policy, and they don't always
exist, I know this, I think that it builds confidence in our
constituents so when we don't agree on some things, maybe there
is more legitimacy to those disagreements because we have found
places where we work together, where we get things done, where
we make things better for our constituents.
Sitting behind me, she didn't know I was going to say this,
is my daughter. I brought my 14-year-old daughter with me to
let her kind of see this process and how it is working. This is
the generation we are talking about. This is the generation
that is the technology native. That means that her world and
her freedom is more found in electronic devices and how she can
communicate with people than the car that would drive her
necessarily to the friend's house.
Being able to commute--I wish we had these in our State
legislature, these little clocks, so I will be quick--being
able to stay productive, get around and explore the freedom
that technology now brings makes a multimodal transportation
infrastructure imperative to our constituents. And I applaud
MAP-21. I think there are some great improvements that can be
made. I know UTA would be happy to share that with you. And New
Starts, finally, is critical, Mr. Chairman.
Mr. Petri. Thank you.
Mr. Claypool.
Mr. Claypool. Thank you, Chairman Petri and Member
Napolitano, and distinguished members of the subcommittee, all.
I thank you for the opportunity to appear today. My name is
Forrest Claypool. I am the president of the Chicago Transit
Authority, the CTA, which is the Nation's second-largest
transit agency with over 1.7 million rides per day in the city
of Chicago and 35 suburbs. And I am here today to talk about
the importance of the Core Capacity projects.
As you know, MAP-21 contained a provision that allowed Core
Capacity projects to be eligible for the Federal Transit
Administration's 5309 Capital Investment Program. Core Capacity
expands capacity within the existing footprint of the transit
network to meet current and future ridership demand, and per
MAP-21, eligible Core Capacity activities include adding infill
stations, expanding platforms, double tracking, improving
signal systems, increasing electrical power, and other
activities that increase capacity by 10 percent or more.
Previous experience with Core Capacity projects in Chicago
has proven that Core Capacity is a cost-effective way to
increase transit ridership and improve efficiency. Due to
ridership gains of nearly 80 percent from 1980 to 2000 on its
Brown Line, the CTA undertook plans to add capacity by
extending the Brown Line's six-car platforms to eight-car
platforms and by reconstructing stations to allow for full
accessibility. This $522 million project was listed as a 5309
capital investment project in TEA-21. Preconstruction ridership
projections forecasted a 22-percent increase, but that target
was surpassed by 2011, less than 2 years after the project was
complete. Ridership is up 36 percent since, over 30,000 rides
each weekday.
The Brown Line capacity project not only exceeded
expectations, it has had a profound impact on economic
development. In 2011, one-quarter of all the city's building
permits were within a half mile of the Brown Line, which is a
remarkable testimony to the economic power of the project.
The CTA has continued to experience consistent ridership
growth over the past decade, especially on its rail lines. We
recently completed in just 5 months a complete rebuild of the
Red Line South $425 million project and the next leg is Red
North, a capital expansion project on the CTA's busiest
corridor, the Red and Purple lines, in order to grow ridership
further.
Chicago's Red and Purple lines are the backbone of our
system, providing 300,000 rides each weekday, extending north
and south through the city and into the northern suburbs. Most
of the northern section of the line is more than 100 years old,
built by private enterprises in the late 1800s, and it is, of
course, famous for its elevated tracks and curves and narrow
platforms that you often see in TV movies like ``The
Fugitive.''
This corridor, from Belmont to Linden, serves 130,000 rides
past such landmarks as Wrigley Field, Loyola and Northwestern
University. And while the age and unique features may be
endearing to some, it is very costly to maintain and to meet
the growing ridership demand in a commercially thriving and
diverse section of our region. Over the last decade, the
ridership in this corridor is up 14 percent, but we are at
capacity, leaving so many passengers on our platforms because
of the need for extra power and room. Constraints on signaling
do not allow us to add more trains to the sets or lines to meet
the crowding and demand. And we have bottlenecks on the system
as well, including the aforementioned curves and a bottleneck
called Clark Junction south of Wrigley Field where multiple
lines converge.
So you are familiar with the legislation in terms of what
it allows, and I mentioned them earlier, things that expand
capacity, but we do estimate that we can in time double the
130,000 rides on the system, and that would compare very
favorably with any New Start project around the country. FTA
recently approved the CTA's request to enter the Red and Purple
line project into project development, so I would like to thank
Administrator Rogoff and the FTA for their assistance.
Before I close, I did want to note that other cities are
pursuing Core Capacity as well, Dallas, Washington, Charlotte,
to name a few, and adding capacity within the transit agency's
existing footprint is critical for both older and newer
systems.
And I would just finally also like to note, if Congressman
Lipinski arrived, just to thank him. He has been a staunch
supporter of the Core Capacity provision, even offering an
amendment in 2011, and is a friend of transit and a tremendous
asset to the city of Chicago. So thank you, Congressman
Lipinski, and thank you to the committee for allowing us to
testify today.
Mr. Petri. Thank you.
I understand his plane was a little late and that he is on
his way. But I am sure he will appreciate your remarks.
Mayor Coleman.
Mr. Coleman. Thank you, Mr. Chairman, and members of the
committee. It is an honor for me to be here today to testify on
this important subject. If I could just indulge you to thank a
couple of members of your subcommittee that are good friends of
mine and great leaders on the State level from Minnesota.
Representative Nolan and Representative Walz have been great
friends and great supporters of transportation. Congresswoman
McCollum, also my Congresswoman, has been an incredible leader
on the Central Corridor and projects all across the East Metro
area and the Twin Cities of St. Paul and Minneapolis. I also
want to acknowledge and thank the group Transportation for
America who helped facilitate my participation here today.
Transit investments like the New Starts program provide
long-term economic impact and generate future economic returns
to individual regions and the national economy. The impact of
transit investments in St. Paul is no different. We are 6
months from opening day for the New Starts-funded Green Line or
the Central Corridor light rail service, which will link
downtown St. Paul, the University of Minnesota, and downtown
Minneapolis through some of the metropolitan region's most
diverse and transit dependent communities.
Already we have seen more than $1.2 billion worth of
investment in new housing and employment opportunities within
the 18 station areas along the 11-mile route. Over 7,500
housing units have been or will be built along the line, many
of those financed to be affordable for students or lower income
households. These are families who will be able to reduce what
they are now spending on their two biggest items in every
family budget, housing and transportation, investing what they
will be saving in going to school, buying a home, or starting a
business.
Small business owners, many of them recent immigrants, are
renovating their buildings and expanding their shops and
restaurants to respond to a growing market created by a
projected 44,000 trips a day on the Green Line. Sixteen
colleges and universities, hospitals, and other facilities are
within blocks of the Green Line, and they have convened the
Central Corridor Anchor Partnership and have taken stock of the
fact that together they employ 67,000 people and have recently
undertaken more than 100 capital projects, accounting for some
$5 billion in capital investment. They are now working together
to determine how they can leverage their roles as employers,
educators, and purchasers of goods and services to strengthen
Green Line neighborhoods.
Twelve of our local and national philanthropic partners
have joined together in the Central Corridor Funders
Collaborative and expect to invest $20 million over the next 10
years, in addition to their individual investments, in
community development activities ranging from supporting the
growth of small businesses to ensuring the continued
availability of quality affordable housing.
I know that time is short, so I won't continue to talk
about all the things that are happening on the line. Suffice it
to say that none of this would have happened, certainly not
over the past 8 years, were it not for the nearly $0.5 billion
Federal New Starts investment that made construction of the
Green Line possible.
The last time there was a major transportation investment
in the same corridor it was the construction of I-94, which
while linking St. Paul and Minneapolis with Chicago and points
east, also sapped the economies of these same neighborhoods,
leading to over 40 years of disinvestment. Learning from that
experience, the FTA and its New Starts program insists that we
as cities and regions demonstrate how we are going to use the
Federal transit investment to enhance the lives of our
residents, build stronger communities, and more competitive
regional economies.
St. Paul and Minneapolis are demonstrating even before the
Green Line carries its first passenger the value of the New
Starts investments in our midst. Recently someone commented on
how I have been lucky to be mayor at such a great time in our
economic history, and I think what they were actually referring
to is the time that we have spent investing in our community
through programs like the building out of the Central Corridor.
There is no doubt that St. Paul is stronger because of the
investment that has been made in this project. In spite of the
economic challenges that we faced, we have continued to see
growth because of this type of investment.
As I alluded to at the beginning of my remarks, the New
Starts program is a critical funding tool for projects across
the country. Last month I was elected president of the National
League of Cities, which represents over 19,000 cities, towns,
and villages across the United States. For many of these
communities and their region, transit investments are a key
component of their future growth and economic success.
Today local communities are raising funds for transit and
the transportation networks of roads and bridges that connect
them to each other and the larger region, often by taxing
themselves, but few local communities have the capacity to bond
or tax for the full cost of the construction. Through the New
Starts program the Federal Government has proven to be an
effective partner in expanding transit services and
underwriting economic growth.
While demand is growing nationally for the New Starts
funding, the program faces threats in Congress. As you know,
unlike most other Federal transportation programs that are
funded by the gas tax, New Starts is paid for with general
funds and is subject to sequestration and yearly budget cuts.
It is critical that this subcommittee and your colleagues
provide additional dedicated funding for this vital program as
a downpayment on our national economic future.
In closing, I want to thank Chair Petri and members of the
committee, all the members of the committee, for their
invitation to testify and for the chance to highlight this
program and the city of St. Paul and its impact on the
partnership between the city, the State, and the Federal
Government. Thank you very much. And I stand for questions.
Mr. Petri. Thank you.
And Mr. O'Toole.
Mr. O'Toole. Thank you, Mr. Chairman and members of the
committee.
I have been called a rail hater, but the reality is I love
trains. I especially love passenger trains. What I hate are bad
incentives. The problem with New Starts is that it gives cities
and transit agencies terrible incentives to spend horrendous
amounts of money to find the highest cost transit solutions
possible in any corridor. We only have to look at the history
of light rail to see this happening.
In 1981, San Diego opened the first modern light rail line
in this country. It cost a little more than $5 million a mile
for a 16-mile line. Translated today's dollars, that is less
than $12 million a mile. They built it without any Federal
funds.
Later in the 1980s, several other cities, including my
former hometown of Portland, Sacramento, and other cities,
opened light rail lines that were built with Federal funds, and
they cost an average of $30 million, two-and-a-half times as
much per mile as the San Diego line. The reason why they cost
so much is because the cities were designing their system to
spend lots of money so they could get a larger share of Federal
funds.
By 2000, the average cost of light rail lines in the New
Starts program was more than $50 million a mile. By 2014, the
Federal New Starts program cost for light rail averaged more
than $110 million a mile, and that is not counting three light
rail subway lines that are costing over $600 million a mile
each. The lowest cost light rail line in the latest New Starts
program is more than $50 million a mile. So costs have
increased by nearly 10 times because cities are essentially in
a race with each other to get as much money as they can out of
the New Starts fund before some other city gets that share of
the money.
This kind of spending cannot be justified on economic,
environmental, or transportation grounds. The light rail and
other rail transit is often touted as a way of curing
congestion, but in fact many of these lines are making
congestion worse. The Minneapolis Hiawatha light rail line
disrupted traffic signal coordination on parallel Hiawatha
Avenue and added 20 to 40 minutes to people's journeys each
day. The Purple light rail line planned in Maryland, the Red
light rail line planned in Baltimore, and many other lines are
actually predicted in their environmental impact statements to
significantly increase congestion in their corridors.
Nor are these lines saving energy. The Utah Transit
Authority's commuter rail lines, for example, use more energy
and emit more pollution per passenger mile than a typical
sports utility vehicle. The Purple line and many other lines, a
new line in Dallas, are all predicted to use more energy than
the cars they take off the road and to emit more pollution than
the cars they take off the road.
What is worse is spending large amounts of money on rail
transit is harmful to transit riders. There have been many
cases of transit agencies cutting bus service to core areas
where low-income people live in order to pay for building
expensive rail transit out to suburban areas where white
middle-class people live. For example, Denver and Salt Lake
both once had higher transit shares of commuting than Las Vegas
in 1990. Then they built light rail and their share of
commuting has declined, whereas Las Vegas, by investing solely
in bus improvements, has doubled transit share of commuting and
now has a higher share of commuting than Denver or Salt Lake.
The sad thing is that buses can do better than light rail
or street cars or most rail transit in almost every situation.
They have a higher capacity, they have much lower costs, they
can carry more people more comfortably and do it without
imposing costs on other people. The only cases where rail
transit is necessary is where you have job centers with
hundreds of thousands of jobs, and those are extremely rare.
There are only four or five of those job centers in the
country.
So I propose that Congress abolish the New Starts system
process, take the money that is going into that fund and put it
in a formula fund that is given to transit agencies based on
how many riders they carry or how much fares they earn each
year. That way transit agencies can use the money to build rail
transit if they want to, but they will be rewarded for
increasing transit ridership. And I think that is the goal of
transit, not to spend lots of money and earn money for
contractors and engineering and design firms.
Thank you very much.
Mr. Petri. Thank you.
Thank you all for your testimony. We have about a half an
hour or so until we will have to leave for votes, and so I will
try to be brief in my questioning. I hope other Members will be
as well and it may give everyone a chance. Otherwise it will be
an hour before we come back. So maybe we could finish up on
this and submit questions for the record also for written
response from the panel.
I would just like to ask a two-part question of anyone on
the panel who cares to respond. And it is, should the New
Starts program include incentives for transit agencies that
deliver projects early and under budget and should it contain
penalties for cost or schedule overruns?
And secondly, the current authorization allows up to 80
percent Federal funding. No project, as I understand it, gets
actually more than 50 percent. Would it make sense to adjust
that number down to a more realistic level?
Would anyone care to respond on one or both parts of that
question?
Mr. Rogoff. I will take the first stab at it. I am sure the
other panelists might have views on it as well, sir.
I would argue that there already is an incentive for
projects to finish early and under budget. That is because we
are in a cost-sharing mode. We, as you pointed out, for the New
Starts programs roughly provide half the cost or less. And
generally we see a trend that if a project is finishing early,
they are also likely to be under budget, and projects that
finish late have a higher propensity to be over budget.
So the sooner they can finish the project, assuming that it
is done to spec, they can not only provide service to the
public quicker, which is obviously their whole goal in the
first place, but they also get to enjoy 50 percent of the cost
savings. So 50 percent of savings would accrue to FTA, but 50
percent, obviously, or more if it is an overmatch program,
would accrue to local political leaders to either put into
other transit projects or other local needs. So I think the
incentives are already there.
As for changing the percentage, this has always been a
longstanding debate over the fact that major highway projects
are often 80-20, 80 percent Federal and 20 percent local,
whereas we are in a 50-50 posture in our New Starts program. We
do have some 80-20 projects that are much smaller BRT projects.
My concern with making it an 80 percent federally funded
program is it will just dramatically shrink the number of
projects we can fund, and we have a pipeline that is very
robust and a lot of cities waiting at the door, and some rural
areas as well. So as much as I would love to be on parity with
highways, I also want to have the head room to get to those
cities and work down our pipeline and build those projects.
Mr. Hughes. Mr. Chairman, can I say that at Utah Transit
Authority, its 2015 projects were concluded this year. Just
here in 2013 we were ahead of schedule, and we saved the
taxpayers $300 million in terms of coming under budget.
I think that anything that can be done as the things that
are mentioned, being able to leverage dollars that you are able
to save into other projects, is certainly a great motivator. We
know in Utah Transit Authority it can be done, and I think it
builds confidence for constituents when they see that we are
good stewards of the tax dollar and being able to leverage
those dollars to be able to do further projects and legitimize
what we are doing.
What you don't want to do is say we need a tax increase or
we need to find an increased local option because it is not
working or we need to make it better. It is a terrible
narrative. So anything that I think is built around being
efficient, being quicker at doing it, coming in under budget,
and allowing your transit authorities to do it that way, to be
able to leverage those dollars further, is the best approach.
Mr. Petri. All right.
Ms. Napolitano.
Mrs. Napolitano. Thank you, Mr. Chairman.
President Claypool, some would argue that Core Capacity
projects should not be eligible under the New Starts program
and such upgrades should be undertaken with a state-of-good-
repair or other FTA formula funding. Given your regular program
of projects, should CTA be able to undertake projects to
address capacity constraints with your regular capital funds?
Mr. Claypool. Yes. The purpose of New Starts, obviously, is
to increase ridership. And as I indicated in my testimony, the
potentially 130,000 additional riders, almost doubling our
capacity on the Red line, would be right at the top of the
charts if you look at any of the proposed New Starts in the
pipeline right now. So it achieves the same objective, but what
it does is it leverages the existing infrastructure of a mature
agency, which makes it more efficient, makes it smart growth.
And actually is, I would say, based on a conservative
principle, that taxpayers have already built that. Let's
leverage it to actually grow capacity that is there and the
latent demand that is there. And we clearly have evidence of
that in Chicago as we are leaving people on platforms.
So we are grateful for the opportunity. We think it was a
farsighted piece of legislation that recognizes that the growth
of Core Capacity and expanding ridership is no different than
growing it in another way in terms of the objectives, but it is
more efficient and effective, and especially in a large system
where we already have a significant ridership base.
Mrs. Napolitano. Thank you.
And, Administrator Rogoff, some critics of making Core
Capacity projects eligible under the New Starts argue that
these projects take away from the chief purpose of New Starts.
And as I stated in the opening statement, adding capacity
through the most beneficial projects should be the goal of New
Starts, regardless of whether the capacity comes in the form of
new systems, an extension or expansion of existing systems.
Do you agree with this view and has FTA received inquiries
or expressions of interest from transit agencies other than
Chicago seeking this funding?
Mr. Rogoff. We have certainly received inquiries. We have
also had a project submitted from New York that was
subsequently pulled back by mutual agreement because they were
obviously overwhelmed with Hurricane Sandy recovery. But they
expect to resubmit it shortly. And it is very noteworthy
because it is the E Line that runs from Queens all the way to
the World Trade Center. It serves 375,000 people a day. And
they estimate it to get something like 13 percent capacity
enhancements above the 10 percent requirement for Core
Capacity. So you are talking about leveraging something
approaching an additional 50,000 riders a day. And as Forrest
pointed out, that would compare more favorably than almost 90
percent of the New Starts projects we have.
So in short, Ms. Napolitano, yes, we have expressions of
interest from CTA and others. But I agree with Mr. Claypool,
and that is our goal for the program is to generate
opportunities for ridership. That can be in a new city, it can
be in an existing city. Our goal is to provide the
opportunities where the demand is, and we are agnostic,
frankly, whether it is a Core Capacity project or a New Starts
projects.
Mrs. Napolitano. Thank you, sir.
And I certainly wanted to say to Mr. Coleman,
congratulations on your election to the National League of
Cities. I have been there before. So congratulations, sir.
Administrator Rogoff, you state in your testimony that the
New Starts program is at a crossroads based on increased demand
from local sponsors for project funds while Federal funding for
the program has been relatively flat in recent years and cut in
2013 due to sequestration. But if the program funding level is
not increased, what can FTA do to fairly distribute those
limited funds if the program is oversubscribed?
And secondly, do you have any ideas for or the authority to
guide or prioritize project selection if you don't have enough
funds to sign the grant agreement with qualifying projects in
any given fiscal year? And add to that another question that I
was thinking of sharing with Chairman Petri, is public-private
partnerships.
Mr. Rogoff. Well, let me just say that we would not be in
the predicament we are in, obviously. The administration, and
we have gotten strong support up and down the administration,
including the White House, to request additional funds to
accommodate the pipeline we have. The crossroads that I cite
really relates to the fact that rather than get the increased
funds that we sought for the last fiscal year, we got a freeze
of the CR and a sequester below that, and that left us some
$400 million behind. That basically cut off our opportunities
to ask for money for new projects. It also required us to
reduce the funds that we had already committed for 2013 to
existing full funding grant agreements, some of which are
represented here in the room, including Mayor Coleman's
project.
We have sought not to do any presumptive feeling,
presumptive assumptions as to where 2014 is going to come out.
Perhaps the agreement reached last night will provide for a
more normal appropriations process that will allow the
Appropriation Committees to prioritize going forward. I think
that is what we need in order to be able to keep pace with the
demand of projects as they are coming to us.
But in short answer to your question, no, we have not
decided that we are going to insist on a higher local match.
Public-private partnerships certainly have an opportunity to
help us work through these projects, but, importantly, they are
not a panacea. We are already only paying 50 percent of the
project, so I haven't seen many public-private partnerships
come in to say that they want to fund 80 percent of the
project.
Mrs. Napolitano. Thank you, Mr. Chair, for your indulgence.
Mr. Petri. Thank you.
Of course, we all know we are facing a fiscal cliff that
could result in a cut of as much as 80 percent for the next
year if we don't figure out how to fill in the hole and provide
the level of funding we have had in the past in the future.
But, anyway, that affects transit and highway and the whole
program.
Mr. Rogoff. Absolutely. This happens to be a general-funded
program rather than a trust-funded program, which is why it was
sequestered. But you are absolutely right, absent a trust fund
fix, we are going to have a nightmare across transit across the
country.
Mr. Petri. Let's see. Mr. Williams.
Mr. Williams. Thank you, Mr. Chairman.
And I want to thank all of you for being here today.
Appreciate that. And I must fully disclose I am from Texas and
I-35 is in my district, and I am a car dealer, but I believe in
optional transportation. So thank you all for being here.
My question to you, Administrator Rogoff, would be pretty
simple. We have touched a little bit about that. But should our
transit providers in Texas be concerned that the FTA will focus
on, with the scarce resources we have, going to focus on the
larger projects at the expense of the smaller projects that may
not be built without the assistance of the Small Starts
program? Because in Texas we are kind of new at this.
Mr. Rogoff. Well, not so new.
Mr. Williams. Well, we have got Dallas and Houston.
Mr. Rogoff. Right. And they are making good progress. But
we are also building bus rapid transit in El Paso. We have done
some great bus improvements in Brownsville. I have been to all
these places. And we are actually seeing, I think, some
visionary thinking on the part of TxDOT, which hasn't always
been there as far as transit investments, in places like San
Antonio.
So I think the short answer to your question, no, sir, I
don't think they should have any reason to be concerned. I
think they share the same concern that everyone else has, and
that is absent recognition of the funding request in the
President's budget, it is going to be hard for us to make
progress on projects, whether they are the big projects or the
small ones. And we have requests for Small Starts in our
budget. We are going to continue going forward. Those are game-
changing investments for some of those communities. And we are
as vociferously supportive of those as the large projects.
Mr. Williams. We just want it make sure the small don't get
choked out by the big ones.
Mr. Rogoff. We have no interest in seeing that. And,
frankly, with the goal of growing transit ridership and meeting
demand around the country, and you heard me say in my opening
remarks the reference to the growing number of elderly, giving
those smaller communities with high concentrations of elderly
some opportunities for folks to stay at home and still have
mobility around their community, to shopping and church, is as
critical to us as the big city projects.
Mr. Williams. Thank you. The second part of my question is
the Core Capacity improvement program appears somewhat to me
that most of the providers in Texas are not going to be able to
be eligible for them. Do you have a plan to ensure that our
States with developing systems that are, again, somewhat new to
this, are afforded the same consideration that others, i.e., in
the Northeast and Chicago? See, everybody from Chicago is
moving to Texas, and that is the problem we have got, see? But
is there a plan, though, to include everybody in it?
Mr. Rogoff. Yes. We will be coming out with our rulemakings
on Core Capacity consistent with MAP-21. But, importantly, I
would not presume that the providers in Texas are not going to
be able to participate, and here is why. The real threshold
requirement to participate in Core Capacity is an improvement
to an existing system that is going to grow capacity by 10
percent or more. Given the way light rail has taken off in
Dallas and how quickly they have exceeded their ridership
expectations, I don't know that they will not be interested in
the program. I have not had this conversation with Gary Thomas.
But I think if not in the near term, in the not too distant
future, as Houston continues to grow, as Dallas continues to
grow, they could have eligible projects and will want to
participate.
But I think there is a misnomer out there that Core
Capacity is just about old legacy systems and is about bringing
them into a state of good repair. The statute states clearly,
MAP-21 states clearly, that these are not for state-of-good-
repair investments, they are for capacity improvement
investments, and we are going to be very clear about that and
transparent about that as we evaluate these projects.
Mr. Williams. Well, that is important because we have got
tremendous grown, we are new systems, and we want to make sure
we have got a dog in the hunt.
Mr. Rogoff. We will be there.
Mr. Williams. We appreciate it very much. Thank you all.
I yield back.
Mr. Petri. Ms. Kirkpatrick.
Mrs. Kirkpatrick. Thank you, Mr. Chairman.
Administer Rogoff, I want to thank you for your strong
support of the Tucson streetcar and your recent efforts to
assist the city to make sure that it opens on time. I hope you
will continue to keep me and Representatives Barber and
Grijalva advised as to next year's opening. So I thank you for
that.
Mr. Rogoff. We are working on it. I just spoke with Mayor
Rothschild over the weekend about this and we are working to
try and get streetcars out there so by the time the beginning
the school year comes to U of A they will have operating
service. We are working on it.
Mrs. Kirkpatrick. That is great. Thank you.
I have three questions. My first question is about MAP-21's
57 percent cuts in bus and bus facility funding. What have been
the impacts of those cuts and what are you hearing from your
grantees?
Mr. Rogoff. There is a lot of concern about this, and this
was an area where the President's budget versus the budget
outline that came out in MAP-21 differed quite substantially.
In our budget, we did propose to fold the discretionary bus
program into what we called the State of Good Repair program,
for which bus operators would be eligible.
What MAP-21 does is it took part of that funding, put it
into a state-of-good-repair formula program that was for rail
operators only, and then took other parts of that money and
spent it else where. And as a result the bus-only operators
really did take a funding hit. I suspect it will be something
that we will be revisiting in our budget and really might want
to be revisited in the next iteration of MAP-21.
We need to remember with all this excitement about rail,
the majority of transit trips in America are still taken by
bus, and some of those bus operators now are really not going
to have a kind of funding stream that will allow them to
address some of their biggest investment needs, those big one-
time items like a new maintenance facility, a new intermodal
center. They may have enough money to replace their fleet, but
nothing else, and that is something we probably need to address
in the next reauthorization.
Mrs. Kirkpatrick. Exactly. Thank you.
My second question is do you favor distribution by formula,
distribution based on meeting elevated performance measures
like small transit-intensive cities, competitive distribution,
or a combination of all three, and why?
Mr. Rogoff. Well, while we are still working on this
internally in the Department in terms of what the next
reauthorization should look like, I think it is important, what
we really want to tackle is the problem that I identified
before. And that is how does a bus operator, how are they able
to tackle those large investments that are not something they
are going to have to cover every year, but at a certain point
the maintenance facility needs to be replaced, at a certain
point other investments, like converting to cleaner natural gas
buses or even electric buses are going to have one-time
substantial costs. And we want to be able to make sure there is
a funding stream that they could partner in to do that.
As for performance measures, that is something that the
administration is interested in across the board. We have not
necessarily tackled it specifically to the question of
incentives for capital operations of a bus-only operator, but
it is certainly something we would be interested in having a
dialogue about going forward.
Mrs. Kirkpatrick. Thank you.
My last question is what funding do you anticipate coming
available for reappropriation due to grantees not being able to
obligate funds as expected? How will those funds be
reappropriated?
Mr. Rogoff. Well, when funds become available--there are
some funds that lapse back, there are some, frankly, old
earmarks that never got off the ground--we try to put that back
in the programs for which they are eligible. So you will see in
the President's budget request for this year, for the New
Starts program in fact, the program we are talking about, we
have about, I believe it is $151 million that we are asking to
regenerate from old bus funding that didn't get used into bus
rapid transit requests for the New Starts program.
So if you will, we are sort of buying down some of our
liabilities there with unused money before we ask the committee
for new money. And I suspect that we would continue that trend
as funds became available.
Mrs. Kirkpatrick. Thank you again. I thank all of the panel
for your testimony today and for answering the committee's
questions.
And, Mr. Chairman, I yield back.
Mr. Petri. Thank you.
Mr. Capuano.
Mr. Capuano. Thank you, Mr. Chairman.
Mr. Rogoff, have I told you how brilliant your testimony
was? As a matter of fact, did you lose a little weight? Because
you were brilliant today. You were great today. By the way,
have you taken a look at that Green Line extension?
Mr. Rogoff. If it isn't plainly apparent, there are things
that Mr. Capuano wants from the Federal Transit Administration.
We have taken a hard look at the Green Line project, as you
know. It is in our funding pipeline. Let me just say that the
greatest breakthrough, I think, not just for the potential for
the Green Line project, but also for reinvestment in the T
system broadly, was Governor Patrick successfully getting a
funding package out of the State legislature. It was a game-
changing package. It enables us now not just to evaluate the
Green Line, but as we have discussed before, evaluate the
critical ability of the T to reinvest in the lines that it is
already operating in a deteriorated state, the Red Line and
others, that really need reinvestment.
And we expect to have meetings with Bev Scott up at the
MBTA. We are currently evaluating the Green Line project as
part of our annual evaluation. That hopefully would play into a
consideration for the 2015 budget request. But importantly, we
are also going to be having a conversation with the MBTA about
their newfound ability to reinvest in the lines that they need
to reinvest in.
Mr. Capuano. I appreciate that. I know you guys have been
great to us and fair to us in many ways. By the way, for the
rest of you, I also want to comment that a few years ago Boston
had a project that we withdrew--actually you rejected, it was a
New Starts project--because it didn't meet the requirements.
And it was a great project, like I have not seen a project I
didn't like, but it just wasn't financially viable. So it was
kind of kicked out politely by the FTA and agreed to by the
State because we all agreed to it, and we have added BRTs.
Mr. O'Toole, I want to tell you that I read your testimony
in particular, and I was particularly pleased at the end of it
where you didn't say cut the program and send the money back.
You said cut the program and send the money back towards
transit, which means, to me, we may have a difference of
opinion on how to do these things, but I wouldn't consider you
antirail when you say simply move the money to other aspects.
Because I will tell you that in my experience in Boston there
just isn't enough money to do capital expansions, capital
improvement, ongoing improvement, reduced fares, on and on and
on, to actually increase ridership. And my expectation is that
the same is true everywhere.
But I would like the hear that, especially from you, Mr.
Claypool. Do you have enough money to do everything you think
should be done at the CTA?
Mr. Claypool. Absolutely.
Mr. Capuano. You don't want that on record.
Mr. Claypool. No.
Mr. Capuano. I know you don't want that on record.
Mr. Rogoff, did you hear that?
Mr. Claypool. I was expecting peals of laughter and it
didn't come, so I apologize.
No, absolutely right. And obviously local governments do
welcome no-strings-attached funding, because, you know, as
Jefferson said, the government closest to the people governs
best. But, obviously, we have a close working relationship with
the FTA and Mr. Rogoff and others. It has been a great working
relationship. And the partnership in all our major projects has
been sharing between local, city and State. So everyone has had
skin in the games in almost all of our major projects, so it
has actually worked very well.
But, yes, you are absolutely right that there is simply not
enough resources to meet the demands that we have to catch up
on some of the legacy repairs that need to be done and meet
what is still there. Every year the demand grows in the strong,
vibrant cities around the country like Chicago that are
economic engines, and this is a big part of that economic
engine.
As some of the CEOs that have come to Chicago said so, GE,
Google, they said, we have moved in here with our people to be
near these corridors of transit. That is why we have come here.
So it is part of jobs, it is part of growth, it is part of
wealth creation. There is plenty of room for additional
investment in that area for sure. Thank you.
Mr. Capuano. I appreciate it. Thank you.
My time is almost up, so I am going to yield back. Thank
you, Mr. Chairman.
Mr. Petri. Thank you.
Mr. Capuano. Mr. Rogoff, don't forget I told you how good
looking you were today.
Mr. Petri. Mr. Sires.
Mr. Sires. Thank you, Mr. Chairman.
I also think you look terrific. And I have a question. I am
going off topic here.
You know, it has been a year since Sandy hit New Jersey,
and I was just wondering if you can give me an update, when are
you going to start releasing some of the $3 billion funding for
transportation resiliency programs that we have on tap?
Mr. Rogoff. Sure. Well, as you know, Mr. Sires, we have
already released $5.4 billion; $1.3 billion of that is for
resiliency, which we sent to the agencies by formula, which
includes New Jersey Transit, of course, as well as the MTA and
the Port Authority.
We are, as we testified I think just a few weeks ago, we
are currently developing and noticing a funding availability.
We stated then that we will get it out before the end of the
calendar year, and we are still on track to do so. So the best
answer I can give you is soon, because I don't have a hard date
for you, but we have been in meetings to review that document
and hear from stakeholders within the last week. So progress is
being made, and it will be soon.
Mr. Sires. Thank you.
You know, I have been involved in light rail where I am
from, very congested area. Just to give you an idea, the town
that I live in is 1 square mile, There is 51,000 people in it.
Hoboken, New Jersey, is the next town over almost, it is about
52,000 people, it is also a square mile.
My experience with the light rail is very different than
Mr. O'Toole's. So I was just wondering if you can tell me what
your experience with light rails in terms of economic
development around the area where the light rail goes through,
because my experience in the area is terrific. We have a light
rail that moves about 45,000 people a day in this area, and,
you know, like I said, it is so congested.
So, I was just wondering, Mayor, and I was a former mayor,
too, so I can share some of your experience, both of you guys.
Mr. Hughes. I would love to take a stab at that. You are
absolutely right. We have a new streetcar opening that
Administrator Rogoff attended. It was about, what, 12 degrees
up there, and we had a city councilman that had a lot to say.
Mr. Rogoff. And windy.
Mr. Hughes. And it was getting pretty chilling at the
opening.
But anyway, we have had a billion dollars of development
that is going around this corridor. And when we talk about
subsidy versus not, you have to appreciate this. When you have
a platform, when you have rail, OK, the one thing that you may
see that communities like myself or the one that I live in
would subsidize is the parking or the structured parking where
you can't afford to see the footprint go a quarter of a mile of
asphalt to accommodate the cars. You may have to preserve that
footprint by structuring your parking.
Structured parking in finite areas is infrastructure. I
would argue that that is as essential as your curb and gutter.
You don't have the market values like you would in a Manhattan
or a populated area where the dirt pencils out the structured
parking. So there is that portion of it.
But again, if you want to see the people moving, and I
chair our Public Education Committee in our State legislature,
or have, these technology natives, the emerging workforce, and,
frankly, that is what we are here for, we are looking at the
future here, they prefer to commute in ways where they can stay
connected. It is a qualify-of-life issue. These stops where
this development is naturally drawn, we are just trying to
accommodate it through smart infrastructure. But it has become
a catalyst for development.
Mr. Coleman. Mr. Sires, thank you for the question. We are
6 months away from the opening of our line before the first
passenger fare is paid on that line, and we have already seen
$1.2 billion worth of investment on it; 7500 units of housing
that are planned are already under construction.
But even beyond the bricks and mortar, the change in what
is happening in that community in terms of who is coming to it,
the demand for housing, the vibrancy of that, the restaurants
that are opening up, the restaurants and the businesses that
are reinvesting in their businesses, we have had a very
expansive bus service through this corridor for 40-plus years
since they tore out the streetcars and built the freeway, but
we never saw this type of investment. We had 40 years of
disinvestment.
And what we are seeing is a revitalization. And it is not
one that pushes people out and puts new people in place. It is
a revitalization that is truly lifting all boats, as well as
bringing in new investment. So whether you are a new immigrant
or you are a multigenerational resident of the area, you are
seeing the benefits of this line long in advance of it actually
opening up.
Mr. Sires. My time is up. Thank you very much, Mr.
Chairman.
Mr. Petri. Thank you.
Mr. DeFazio.
Mr. DeFazio. Thank you, Mr. Chairman.
It has been a while since I visited the CTA, Mr. Claypool.
What is your current backlog of deferred maintenance, you know,
capital that is past its lifespan.
Mr. Claypool. There are some figures from the regional
transit authority, which I think are exaggerated, so I don't
want to cite them. But clearly it is in, you know, the billions
and billions of dollars. Currently under Mayor Emanuel we have
launched the most ambitious modernization and State of Good
Repair program in the CTA's history, $4 billion in a 5-year
period, and we are well on our way to bringing our system up to
a state of good repair.
It is going to take a number of years. It is going to take
a lot of money. And, frankly, we can't do that and also meet
the ridership demand and the growth opportunities that we have
without the assistance of the Federal Government through this
program, and that is why it is so critical.
Mr. DeFazio. OK.
Mr. Rogoff, what is the national number we have now. I
haven't seen that for a while either.
Mr. Rogoff. Well, we were at about $87 billion.
Mr. DeFazio. Eighty-seven ``B'' billion?
Mr. Rogoff. That would be a billion with a ``B.'' Excuse
me. I transposed my digits, I think. It was $78 billion.
Mr. DeFazio. OK.
Mr. Rogoff. But we, obviously, even with the investments we
are making with our new State of Good Repair program, and
importantly to point out some leadership by the States that are
raising revenues to reinvest, we still are growing more than we
are buying down the backlog since we published that number
probably 3 years ago. We have not updated the number. It may be
time to do so, and I will take that back because we should
probably have more updated numbers for you.
Mr. DeFazio. OK. I want to thank you for the work you did
early on in tightening up some of the Buy America requirements,
and I would observe that were we to make those investments we
would create one hell of a lot of jobs.
Mr. Rogoff. We are very proud of, when we were first coming
into office having almost 53 Buy America waivers a year, and we
are now down to 3, and we are not happy about the 3.
Mr. DeFazio. Yeah, we want to get to zero, but that is
great.
Mr. Rogoff. Our goal, too.
Mr. DeFazio. We will get people working on it.
You know, I think the chairman brushed on this, but I would
really like to focus a moment. Looking at the exhaustion of the
trust fund in fiscal year 2015, if Congress come up with new
sources of money before October 1st next year, what would that
do to the transit programs?
Mr. Rogoff. Well, the vast majority of our funding, some 80
percent of it, unlike the New Starts program, comes from the
trust fund. And we obviously cannot be obligating dollars to
the Nation's transit agencies without having cash behind them.
We have processes in place on how we would seek to manage cash,
but I think it is important for folks to understand our agency
used to be called the Urban Mass Transit Administration up
until ISTEA in 1990, and people kind of view it as an urban
program.
The reality is, is that the Federal dollars are much more
critical in terms of a percentage of their total annual budget
to the suburban and rural operators than they are to the
biggest urban systems. Now, if we had to allocate a cut
consistent with no restoration of the trust fund to cities like
Chicago and Minneapolis, it would have a very big hit, but to
many of the, like I said, suburban, exurban, and rural
operators, the Federal money is 100 percent of their capital
budget. And the Federal money in a lot of those communities
also pays for transit operations. So we could see whole
operations close their doors if there was literally no
restoration and we really did fall off the cliff that Chairman
Petri was referring to.
And right now we are taking a very careful look at when
this scenario actually hits. We are hopeful but not at all
assured that we are going to get to 2015, and we are currently
reviewing those numbers to figure that out.
Mr. DeFazio. So it might happen before fiscal year 2015?
Mr. Rogoff. We are currently looking through the numbers,
but if we get to 2015 it will be on fumes.
Mr. DeFazio. OK. Fumes.
Thank you, Mr. Chairman.
Mr. Petri. Mr. Nolan.
Mr. Nolan. Thank you, Mr. Chairman. And I want to join the
other members of the committee in thanking the panel for being
here today.
And I particularly want to thank and congratulate Mayor
Chris Coleman from St. Paul for the work that you have done in
the Central Corridor light rail and pointing out to the
committee the tremendous economic benefits that have flowed
from that, not to mention the fact that the quick and easy
availability of an alternative transportation mode for some
44,000 people.
In the interest of keeping pace with Mr. Capuano, we will
be counting on you, as well as you, Mr. Rogoff. We have got
what is known as our Northern Lights Express that we are
planning to take the people from the Twin Cities metropolitan
area up to our shining city by the sea and great seaport of
Duluth, as well as the North Star heading up through the
tourism areas of the northern part of our State.
And I remind all here that the interstate system and the
Federal-State highway systems going north out of the Twin
Cities metropolitan area, as well as the rest of the
metropolitan, are rapidly becoming slow-moving parking lots.
And the fact is, is that we need to get very, very serious here
about exploring and finding more ways to better fund light
rail, and for that matter heavy rail passenger transit in this
country.
So I commend you, as well as Mr. Hughes and Claypool, for
the work that you are doing, and rest assured that the
majority, I believe, members of this committee on both sides of
the aisle here appreciate the work that you are doing and are
committed to finding more ways to provide some efficient,
stimulative, pro-growth, job-creating, convenience-creating
alternatives to our Federal-State highway system. So I thank
all of you.
And, Chris, you in particular, we are so thrilled that you
are now leading the National League of Cities and taking the
great leadership that you have provided in our capital city of
St. Paul and our Twin Cities metropolitan area and sharing that
with other mayors around the country. Thank you for being here.
Mr. Coleman. Thank you, Congressman Nolan. And I appreciate
those comments, but I also appreciate your kind of thinking
about the weekly exodus from the Twin Cities to parts of not
only northern Minnesota, but for the chairman's benefit, a lot
of my weekly paycheck goes to the great State of Wisconsin as a
cabin owner in northwestern Wisconsin and a father of a
University of Wisconsin student. I feel actually I should be a
mayor of some town in Wisconsin just honorarily at the very
least. But it does create a huge problem as we really try to
figure out how to expand that economic reach into all parts of
the State and really the region, including western Wisconsin,
because we are getting congested in every different direction
from the cities.
So I think, you know, this isn't is a single bullet
approach. This is a multimodal approach. This is improving our
roads. It is improving our transit systems and bus rapid
transits and light rails and all those things. I think that the
reason why it is working so well in the Twin Cities area is
because there is a recognition that a true multimodal transit
system is the best way that we are going to serve all of our
interests.
Mr. Nolan. Thank you
Mr. Petri. Ms. Esty.
Ms. Esty. Thank you, Mr. Chairman.
I want to thank the panel for being here today.
As we look towards the reauthorization of MAP-21, it is
important for us to consider the current status of the New
Starts program in order to improve performance in the years
ahead. The FTA has full funding grants authority on 17 projects
and one of those is in my district in New Britain, Connecticut.
Those agreements represent approximately $14 billion in funding
commitments, but the New Starts program was appropriated
slightly less than $2 billion. Furthermore, the funding for
these projects is doled out in predetermined annual amounts,
and depending on variabilities and construction schedules, this
can leave projects without adequate funding when it is needed,
which then ends up raising the cost of projects by forcing
sponsors to borrow money to make up the funding difference.
For Administrator Rogoff: Is there anything that we can do
here in Congress to improve project coordination and funding
flexibility to prevent the kind of scenario I just outlined
where we are actually raising the cost of projects? And are
there any unnecessary restrictions that prevent the FTA from
expediting review and analysis of spend work plans to maximize
construction time and improve performance?
Mr. Rogoff. Well, thank you for the question. We are
dismayed, obviously, that in 2013, for the first time in
anyone's memory, we were not able to provide the amounts
articulated in our full funding grant agreements. It is ironic,
people, project sponsors have complained of the extraordinary
rigor and requirements that we put on project sponsors to
demonstrate to us that they can pay their share of the project.
So what has happened in 2013, is the FTA that can't pay its
share of the agreement. And we obviously want to get back on
track with not only our existing agreements, but the ability to
bring more projects into the program.
The solution to that, from our perspective first and
foremost, is to fund the President's budget for the program,
and that will go a long way toward getting us back on track.
As far as the processing of projects, we have already done
a good bit, both when we first came in, in 2009, on
streamlining our processes, and then MAP-21 helped a lot,
because there were certain streamlining measures that we really
couldn't entertain because the process was fixed in statute,
and MAP-21 went a long way to doing that.
Now, are there opportunities for yet more streamlining and
efficiency? Yes. In fact, I just cited one in my oral remarks.
We have recently, just in the last couple of months, put out a
new planning tool for forms of travel forecast modeling, which
we require of all the sponsors to really show us that the
ridership is going to be there. Earlier, I believe, actually
Mr. O'Toole was talking about consultants. Well, normally,
transit agencies have to pay these consultants quite a lot of
money do a very voluminous study to forecast ridership numbers.
We believe that the model that we have now come up with is
certainly adequately accurate for our purposes and could take
anywhere from a year to 2 years off just that requirement
alone.
Earlier, when I first came into this job, the FTA had an
alternatives analysis process that was separate and distinct
from the NEPA-required alternative analysis process. There was
no need to have those duplicative processes, and we got rid of
it.
So progress is being made. There is more progress yet to be
made. But we share your desire to move projects through
pipeline more quickly. We need there to be funding at the other
end to participate.
Ms. Esty. I think we can agree on that. And again, we
appreciate your work on leaning these processes, so more of
these funds, which are more limited than we wish they were,
really are getting on the ground, making a difference in
communities. And I think we are all very well aware. I was
meeting with folks at home last week, and the folks in the
construction industry were saying they are looking very
seriously at transit-oriented development for our smaller
cities in Connecticut because for the demographic reasons we
have talked about. Young people want to live in cities. They
don't want to drive cars. I have three of such young people,
and, you know, only one has a car and it is 14 years old, and I
don't think there will be a replacement when that dies.
And that really is different. And we also have an aging
population. For both of those populations it is going to be
vitally important that we explore all ranges of transit and
include things like light rail, make it more possible, buses,
light rail, metro systems, to make it possible for people live
where they want to live, including in our cities, and get to
other cities without cars. So thank you very much for your
work.
Mr. Petri. Thank you. We have a little time, and I have a
few questions. If anyone else wants the opportunity, please
indicate so as well.
I have two questions, one for Administrator Rogoff and then
one for the representatives of the different transit
operations. Congress added Core Capacity projects to New Starts
eligibility and specifically did not increase the amount of
money authorized. So how will the FTA balance this new category
of projects with the existing demands for traditional New
Starts projects?
Mr. Rogoff. Well, Mr. Chairman, we have actually requested
more funding in the budget than is authorized, in part, and the
President, in his ``fix-it-first'' initiative, included a large
element, about $500 million, to really jumpstart the Core
Capacity program. And the ``fix-it-first'' initiative, it was
not bound by those authorization levels. We, obviously, as is
existing in a number of areas within the transportation budget,
not just the FTA, there is a difference between the authorized
levels in MAP-21 and the actual budget request. I think this is
a critical question going forward for the replacement to MAP-
21, and that is, what is the appropriate levels for these
programs? Especially this one, being a generally funded
program, while it has its own challenges, and the biggest
having been sequester this past year, it is not subject to the
limitations imposed by the trust fund, since it comes out of
the general fund, and we want to continue to make progress to
accommodate not only the projects in the pipeline on the New
Starts side, but get the very significant ridership increases
that we could get from these Core Capacity projects in existing
systems.
Mr. Petri. The other question for the transit authority
representatives is that each of you mentioned the significant
economic developments associated with transit-oriented
development that took place along the corridors. To what extent
were you able to leverage that private sector investment to
support the cost of building the projects through TIF-like
districts or tax incremental or whatever, and what are the
impediments to capturing that increase in value for the transit
operations now?
Mr. Hughes. Let me say, Mr. Chairman, I appreciate that
question. There are barriers to entry when we talk about this.
As I mentioned, the parking. The structured parking is one of
the biggest challenges in terms of getting transit-oriented
development around these platforms.
In our case in Utah, the transit authority did not have
condemnation authority. So when you go about purchasing
corridor, you are sometimes buying in excess land that you
don't necessarily need. There is probably a combined 80 acres
of land around these platforms that could be used and parlayed
into development. This would be land that right now is not on
the tax rolls of counties or cities that we could put back on
the tax rolls and bring development to it.
And that is what you have seen, and I have mentioned, along
the Sugar House line, the streetcar that just opened, we are
seeing that happen. We have used tax increment financing, or
counties have, to help with the structured parking, but there
is only so much. We have talked today and I have heard that,
you know, there is more needs than there is ever resources to
address.
And I think that one of the barriers we have to overcome is
how we talk about structured parking and is it a public
infrastructure that allows for more development to happen
around those platforms? That is an area that we are working on.
Because UTA has this land, we are trying to find ways to parlay
the value of that land with public-private partnerships and see
that draw more and more development to those areas.
But that would be the answer. The answer is, it is there,
and you have to have high density if you are going to do it,
and with that high density there are some inherent costs that
are different than maybe your traditional development that can
afford asphalt and surface parking.
Mr. Rogoff. Mr. Chairman, if I could just speak to that
real quickly. We would have a great interest in having a
dialogue with the committee on how to improve this paradigm
going forward, because not just in New Starts projects, but in
major transit capital improvements around the country, whether
there is significant Federal participation or not, we are
seeing greatly increased tax revenues without having to enact a
tax increase because they are bringing more dollars into these
municipalities.
The great challenge is to get those municipalities to
recognize that and put that money back into the transit agency
that needs it for things like operations and maintenance of the
line they built, and that has been a huge frustration. When we
look at the extraordinary amount of taxable value we have
created with these investments, there needs to be some broader
recognition about the need to reinvest that into the system or
we will have state-of-good-repair problems with comparatively
new investments if we don't keep up with maintenance and
operations.
And that has certainly been a problem. When you think about
a city like Chicago where Forrest Claypool is and the amount of
value that the CTA service represents and the annual struggle
that he has to go through to meet payroll and do all of his
maintenance, which have been particularly acute in some recent
years, we need have an open-minded discussion of how we can do
better by that.
Mr. Claypool. It is a very good question, Mr. Chairman, and
I do think value capture, as we describe what you are
describing, is something that is a potential in projects of
this size and scope. As I mentioned in my testimony, the fact
that in 2011 one-quarter of all city of Chicago building
permits issued were within a half a mile of the Brown Line
stations that had added Core Capacity and been improved, and
the median home values near the Brown Line increased by 40
percent, and that would be for commercial activity as well.
So when a project like this does come along, we do believe
that it creates wealth, we do believe it raises property
values, and there is a concomitant potential for a value
capture that could be a part of a project, including a public-
private partnership. So I think that is something we definitely
would look at and I think individuals throughout the country
should look at.
Mr. Coleman. Mr. Chair, if I may add, there is the
beginnings of a program similar to that in Minneapolis. The
State legislature has authorized a value capture situation for
a streetcar buildout. It is a narrow exemption right now in the
tax increment laws. So that we are going to see how well that
works and how well that facilitates buildout of streetcar lines
and other infrastructure projects like that.
But I do want to just add, you know, every time the
representative from Salt Lake speaks, I just remember how
jealous I am of the system that they built out there, not
because they have the most miles or because they have these
fancy cars, but because I see how it is transforming that
community. And so as a mayor of a medium-sized Midwestern town
who sees the competition that we have to attract talent, to
attract companies, to attract our future workforce, and I see
what Salt Lake is doing, what Denver is doing, what Dallas is
doing, this isn't just a race to build out a fancy new line.
This is a race for relevancy and a race for vibrancy.
And that is the real competition that we have here. As we
project out the economy of the Twin Cities, we have a very
strong base of almost 20 Fortune 500 companies, but we can't
continue to attract the talent that we need to staff those
companies and to grow those companies unless we have the kind
of amenities, the kind of communities that can be built through
things like great transportation networks, as has been
mentioned by a number of speakers, the changing nature of how
young people commute and get about.
So this is critically important for the future of our
communities if we are going to be strong and we are going to be
economically vibrant.
Mr. Petri. Thank you.
Ms. Napolitano.
Mrs. Napolitano. Yes, sir.
That brings up the question again of public-private
partnerships. Has the League of Cities begun to look at the
possibility of facilitating the Wall Street investors to be
able to come in and look? And would it make any difference in
being able to do prioritization of projects if they had
additional funding through public-private partnerships? Since
there is an increase in economic benefit to the areas, why are
we not looking at being able to marry them and being able to be
a little bit more proactive in that area? Anybody?
Mr. Coleman. Just with respect to, Ms. Napolitano, to the
National League of Cities, I don't know that we have begun that
conversation. Someone from NLC can poke me if I am wrong on
that just in terms of that kind of investment capital.
But I think it is one of the things that has been helpful
as the New Starts program has looked at some additional
criteria, is to really see what the economic vitality and
potential is and not just react to existing kind of traffic
patterns and existing population patterns, but to determine
whether or not, whether it is through public-private
partnerships, with land banking, whatever it might be, whether
there is an opportunity to say we are going to shape how our
communities are going to grow because we are going to build our
transit lines to certain areas.
In my community, for instance, we are studying the River
View corridor where one option would be move, whether that is
BRT or some other, potentially LRT, but we are looking a all
molds. We have an old fort site with 130 acres in the middle of
the city of St. Paul on the banks of the Mississippi River, 5
minutes from the airport. Right now that is vacant. So under
traditional criteria that wouldn't, you know, obviously, meet
ridership capacity or considerations.
But if we start thinking about what we could create there
if we are building transit in from the beginning of the
conversation as opposed to at the end of the conversation, then
it opens up a lot more desirability for that kind of investment
and for, quite frankly, all along that corridor. So it is an
important consideration that I think we need to look at more.
Mrs. Napolitano. Mr. Rogoff.
Mr. Rogoff. Well, I think Mayor Coleman has identified a
new opportunity, and that is, there is a universe of projects
that would not pencil out immediately in terms of Federal
participation. Where they can have private partners that want
to take the risk, they would certainly be most welcome. It is
sort of betting that the development will follow.
I will tell you that this preceded the Obama administration
coming in, but there was a pilot program for new public-private
partnerships in the transit space. Three projects were
selected, but only one of them, part of the Fast Tracks
Program, the so-called Denver Eagle projects in Denver,
Colorado, was built. In the other two instances, the private
players left the building because of the recession largely.
I think it is important to recognize that at least
traditionally in transit, where the public-private partnership
has come in, it has been on the financing, and often on the
financing of the local match, and there a lot of that is just
replacing availability payments long into the future, sometimes
from the legislature, sometimes from local taxation for local
tax dollars that are made available more immediately.
We have a saying in the FTA that if you have seen one
project, you have seen one project, because it is really true
that no two of them are alike in terms of their financing
structure and what they are necessarily trying to achieve. We
have been trying to be as open minded as possible to include
public-private partnerships in having people bring their
financing package to us. Our principle remains the same. We
just need to know that the local financing will be there to
match ours.
I think, importantly, we are much more, when we evaluate
the risk of a project, and here I mean cost and schedule risk,
we are much more sympathetic and interested in projects where
they really have transferred some risk to the private partner
as opposed to having someone who is just going to come in as a
lender and accept no risk, but might accept some of the upside
potential. There really needs, I think, ideally to be some risk
transference that sort of relieves the taxpayer of upside cost
risk, and that is where we really get the benefit of the
public-private partnership.
Mr. Hughes. I think you are on the right track. This is one
of the areas that I think that we could engage the private
sector. If you look at Hong Kong, this is Communist China, they
are paying for their mass transit through the development above
their stations. It is an amazing sight to behold.
The challenge is, sometimes, if you have a developer that
said, look, I will go in half on the parking structure, I will
go 50 percent, you go 50 percent, well, federally built parking
structures are not necessarily the same 50 percent that a
private developer would pay for that cement structure, and 50
percent of Davis-Bacon and all the things required for a
Federal project, your developer says, well, wait a minute, that
is like 100 percent if I built that amount of stalls on my own
at this development away from your platform.
So sometimes we have to find out where some of the
regulatory climate can be dealt with to keep some of those
barriers that we have created, not intentionally, but as an
unintended consequence. But it is absolutely critical to see
this done in a more comprehensive way with the private sector.
Mrs. Napolitano. Well, to me this is where the organization
can begin looking at all those aspects and begin to put them in
perspective so that you can then begin to do the outreach and
get them in as partners to be able to relieve not only the
constituency, the Federal Government, and also provide the
service to the community.
So, to me, we talk about it, but we are not really delving
into it, we are not really asking them to come in and say, what
are your rates, what do you require, what can you do, what will
you do, and will you work in partnership with the communities
who are trying to develop more business in the area, which is
going to be beneficial to the local economy. So, you know, I
had asked that you maybe keep that in mind as you move forward
because to me that is, again, thank you, something we will be
facing in the near future.
Green technology, development of those green areas in the
parking structures to be able to put in the plug-ins for
electric vehicles, being able to help the community do all
kinds of other things in multiuse buildings. And so there is
all kinds of things that could come from those partnerships
that would benefit an investor.
So, thank you, Mr. Petri.
Mr. Petri. Thank you. Thank you all for your testimony
again.
And I would ask unanimous consent the record of today's
hearing remain open until such time as our witnesses have
provided answers to any questions that may be submitted to them
in writing, and unanimous consent that the record remain open
for 15 days for additional comments and information submitted
by Members or witnesses to be included in the record of today's
hearing. Without objection, so ordered.
The subcommittee stands adjourned.
[Whereupon, at 3:40 p.m., the subcommittee was adjourned.]
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