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By basing the denominator in the cost effectiveness equation on information already being used to represent the effectiveness of proposed Small Starts projects, no additional analysis or reporting is required by the project sponsor.  Moreover, by avoiding the use of additional measures of economic development in the calculation of cost effectiveness, the approach proposed here minimizes the potential for added uncertainties related to the estimate of the economic development impacts of projects to either over- or under-value the merits of proposed projects.  Finally, FTA believes that this measure is much easier to convey and understand than alternative approaches to incorporating economic development into the cost effectiveness measure.

2.1.3 Small Starts Reliability

The reliability rating will be based on the following factors: 1) transit-orientation of existing and future land use plans and policies 2) project sponsor experience with implementing previous projects 3) industry experience with the proposed project type in similar settings 4) the reliability of the forecasting methods 5) the degree to which future ridership projections depend on substantial population and employment growth beyond the opening year 6) the use of innovative contractual agreements for operations 7) and mitigation actions taken by the project sponsor.  

FTA believes a requirement to adjust ratings based on the reliability of the data should be included to satisfy several SAFETEA-LU requirements.  Understanding uncertainty will allow FTA to better recommend funding among projects with similar costs and benefits, but with significant differences in uncertainties.  A better understanding of uncertainties will facilitate a better understanding of why costs and ridership vary from predictions so that better approaches to forecasts can be developed for future projects.  Additionally, because a major purpose of planning and project development studies is to disclose information for decision-making, a more explicit representation of uncertainties better informs decision-makers by providing richer information about the likelihood of achieving the project benefits and costs.   

2.1.4 Small Starts Other Factors

FTA proposes to incorporate under “other factors” two specific considerations. 1) if a proposed Small Starts project is a principle element of a congestion management strategy, in general, and a pricing- strategy. , in particular, the project justification rating will be increased if near a breakpoint.  2) FTA proposes to rate the degree to which a Small Starts project addresses significant transportation problems or opportunities in a corridor and the appropriateness of the preferred alternative as a response by reviewing the contents of the “make-the-case document” as a standard criterion under “other factors.” In cases where a project’s justification rating is near a breakpoint, a ‘‘high” make-the-case rating will increase the project’s  rating- and a “low” make-the-case rating will decrease the rating.  Moreover, FTA will continue to encourage the reporting- , under “other factors,” any information on significant project benefits that project sponsors do not think is captured under the other criteria.

For several years, FTA has required a make-the-case document that includes specific, quantifiable information on the merits of a proposed Small Starts project.  The make-the-case document is intended to provide FTA and other stakeholders with a coherent, succinct narrative

Federal Transit AdministrationPage 15

Guidance on New Starts Policies and ProceduresJuly, 2007

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