Section 5309 (Section 3(j)) FTA New Starts Criteria

SUMMARY: The Federal Transit Administration (FTA) is amending its

December 19, 1996 Notice describing the criteria it will use to

evaluate candidate projects for discretionary New Starts funding under

Title 49 United States Code (U.S.C.) Section 5309. Specifically, the

Notice is amended to reflect Departmental guidance issued on April 9,

1997 establishing a Department-wide standard for the value of travel

time; correct an editorial error regarding the application of travel

time savings to the criteria for mobility improvements; account for the

lack of standardized national assumptions regarding the unit value of

criteria pollutant and greenhouse gas emissions; reflect a change in

the definition of ``boarding points associated with the proposed new

start'' for purposes of evaluating mobility improvements; and reflect a

change in the definition of ``new start service area'' for purposes of

evaluating operating efficiencies.

EFFECTIVE DATES: This Notice will be used to evaluate projects for

discretionary new start funding recommendations for the 1999 Fiscal

Year.

FOR FURTHER INFORMATION CONTACT: John Day, Office of Policy

Development, FTA, Washington, D.C. 20590, (202) 366-4060.

SUPPLEMENTARY INFORMATION:

I. Background

On December 19, 1996, FTA issued a Notice describing the criteria

it will use to evaluate candidate projects for discretionary New Starts

funding under Title 49 United States Code (USC) Section 5309. These

criteria replaced those which had been in effect since the May 18, 1984

Statement of Policy on Major Urban Mass Transportation Capital

Investments, and incorporated the expanded range of factors implemented

by the Intermodal Surface Transportation Efficiency Act of 1991

(ISTEA).

Value of Travel Time Savings

The Notice established a measure for the statutory criteria of

``mobility improvements'' of ``[t]he projected value of aggregate

travel time savings per year (forecast year 1) anticipated

from the new investment, compared with the no-build and TSM

(Transportation System Management) alternatives.'' It further

established the value of total travel time savings at 80 percent of the

average wage rate in the urbanized area.

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\1\ The original Notice established the forecast year as year 20

of the analysis period, and noted that an opening year forecast will

be used for financial analysis and as a check on initial ridership

projections.

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On April 19, 1997, the Secretary of Transportation issued ``The

Value of Travel Time: Departmental Guidance for Conducting Economic

Evaluations,'' which established department-wide guidance for

calculating the value of time saved or lost by users of the

transportation system. The values of time and procedures set forth in

the Departmental guidance are to be used for all DOT cost-benefit and

cost-effectiveness analyses that employ measures of the value of travel

time lost or saved. They replace mode-specific methods for valuing

travel time with a consistent set of monetary values applicable to all

modes.

The Departmental guidance establishes a common value of local

travel time for automobile drivers and passengers, public transit

passengers, pedestrians, and bicyclists. Separate values are specified

for personal travel (including commuting, shopping, conducting personal

business, and social and recreational travel), business or work-related

travel, and travel by truck drivers.

Hourly wages were derived from several sources. For personal travel

by surface modes, the standard adopted is median household income, as

reported by the Bureau of the Census, divided by 2,000 hours. This

figure amounted to $17.00 in 1995. The standard for business travel is

derived from employee compensation figures supplied by the Bureau of

Labor Statistics. For business travel by surface mode (except truck

drivers), the hourly wage figure was $18.80 including fringe benefits.

For truck drivers, the hourly wage was $16.50.

The values adopted by the Department for travel time are as

follows: 50 percent of the wage for all local personal travel,

regardless of mode; 70 percent of the wage for all intercity personal

travel; and 100 percent of the wage (plus fringe benefits) for all

local and intercity business travel, including travel by truck drivers.

In special cases where out-of-vehicle time (access, waiting, and

transfer time) on transit trips is isolated as an object of analysis,

time is valued at 100 percent of the wage.

Using these percentages and wage rates, the hourly value of travel

time for local travel on surface modes (transit's market) is as

follows: $8.50 for personal local travel by all (50 percent of the

median household income, divided by 2,000 hours); $18.80 for local

business travel, and $16.50 for truck drivers. The hourly value for

walking, waiting, and access time associated with transit improvements

is $17.00 (100 percent of the median household income, divided by 2,000

hours).

The Office of the Assistant Secretary for Transportation Policy

will publish periodic updates of the values of travel time to be used

in DOT economic analyses. This updating will be performed using the

same data sources used to develop the initial values, including the

Bureau of the Census, the Bureau of Labor Statistics, and the Air

Transport Association. The updating process will automatically index

the values to reflect increases in hourly earnings throughout the

nation's economy.

Application of Value of Travel Time Savings

In addition to the revised values for travel time, the December 19,

1996 Notice is being amended to correct an editorial error regarding

the application of travel time savings to the criteria for mobility

improvements. Specifically, in the summary of comments to the September

28, 1994 Policy Discussion Paper, the Notice indicated that travel time

increases ``should not be counted against overall travel time

improvements for new riders (Federal Register, Vol. 61, No. 245, p.

67100).'' This position was adopted because some people who switch to

transit can incur longer travel times, but are deriving other benefits

such as reduced travel under congested conditions, improved ride

quality, reduced commuting costs, etc. Lacking a reliable means for

placing a value on such benefits, the value of the travel time increase

would be used as a surrogate and not be deducted from overall travel

time savings.

However, section II(a)(1) of the policy statement itself notes

incorrectly that the projected value of aggregate travel time savings

per year ``is a net figure in the sense that travel time increases

should be explicitly considered and used to offset the time savings of

those people who experience savings (Federal Register, Vol. 61, No.

245, p. 67105).'' This statement is incorrect, and this amendment

removes the above sentence from the original Notice.

[[Page 60757]]

Valuation of Criteria Pollutant and Greenhouse Gas Emissions

The Notice established a measure for the statutory criteria of

``environmental benefits'' of ``the value per year (forecast year) of

the forecast change in criteria pollutant emissions and in greenhouse

gas emissions, ascribable to the proposed new investment, calculated

according to standardized national assumptions about the unit value of

each emission.'' These values were to have been determined by the

Environmental Protection Agency (EPA). However, to date no values have

been set. This amendment strikes the requirement that a value be placed

on the forecast change in emissions.

Definition of ``Boarding Points'' for Evaluating Mobility Improvements

Section II(a)(1) of the Notice states that one of the factors for

rating the mobility improvements expected to be derived from a proposed

new start would be the absolute number of low income households

(households below the poverty level) located within \1/2\-mile of

boarding points associated with the proposed system increment (Federal

Register, Vol. 61, No. 245, p. 67105). This is still true. However, the

discussion for this measure found in the summary of comments (Federal

Register, Vol. 61, No. 245, p. 67100) defines ``boarding points

associated with the proposed system'' as ``not limited to stations that

are part of the proposed project,'' and including ``boarding points

that will feed into the new system.'' In practice, this would have

included bus stops on routes serving the new stations, as well as

existing rail stations on lines that intersect with the new system at

the new stations (such as when a new rapid rail line intersects with an

existing commuter rail line, and a new station is constructed).

In developing guidance for this measure, FTA concluded that

including all potential boarding points associated with a new system

would place an unnecessary and unfair burden on local agencies, would

lead to reporting inconsistencies, and lack comparability among

projects proposed for discretionary new starts funding. As a result,

this amendment revises this measure to include only those stations

located directly on the proposed new facility.

Definition of ``Service Area'' for Evaluating Operating Efficiencies

Section II(a)(3) of the December 19, 1996 Notice indicates that the

measure for ``operating efficiencies'' would be based on the ``forecast

change in operating cost per passenger mile'' for the new start service

area, defined as ``that part of the system that will be directly

affected by the proposed new investment.'' Though not specifically

stated, this measure would have included the change in operating cost

per passenger mile not only for the new facility, but also for

connecting bus routes and rail lines.

In developing guidance for the revised criteria, FTA concluded that

this measure as defined would place an unfair and unnecessary burden on

local agencies, would lead to reporting inconsistencies, and lack

comparability among projects proposed for discretionary new starts

funding. As a result, this amendment revises the definition of

``service area'' for this measure to include the entire transit system.

II. Incorporation of DOT Guidance Into FTA New Starts Criteria

The December 19, 1996 Federal Register Notice adopted aggregate

travel time savings as one of the measures for ``mobility

improvements.'' This aggregate includes travel time savings for all

travelers affected by the proposed transit investment; new and existing

transit riders as well as highway users, business travel as well as

personal. Given that the DOT Guidance establishes different values for

different trip purposes (plus additional values for wait time and truck

drivers), FTA has adopted a weighted average approach for valuing

travel time savings (or increases) associated with a proposed new

start, using distributions of travel by mode and by trip purpose.

The revised value of travel time consists of three components: out-

of-vehicle time for all modes; in-vehicle time for highway modes; and

in-vehicle time for transit modes.

Out-of-vehicle time (time spent accessing, waiting, and

transferring) is valued at 100 percent of the wage rate, as specified

in the DOT Guidance. Using the wage rates specified earlier, out-of-

vehicle time is valued at $17.00 per hour.

The value for in-vehicle travel time for transit modes is a

weighted average based on trip purpose, i.e., business or personal. The

DOT Guidance uses data from the 1990 Nationwide Personal Transportation

Survey for trip purpose information. For surface modes, the

distribution for local travel is 95.8 percent personal, 4.2 percent

business. This results in a weighted average value of in-vehicle time

for surface modes, for all purposes, of $8.90 per hour.

The value for in-vehicle highway time includes an additional

variable for vehicle mix, as the DOT Guidance establishes a separate

value of time for truck drivers. For this component, FTA calculated a

weighted average of highway travel time based on vehicle mix

information provided by the 1995 Highway Statistics report published by

the Federal Highway Administration. According to this report,

automobiles account for 92.4 percent of vehicle miles traveled (VMT),

and trucks account for the remaining 7.6 percent. Using these figures,

and applying the weighted average value of in-vehicle time for business

and personal travel as calculated above, the resulting value for in-

vehicle highway time is $9.50 per hour.

III. Amendments to Section 5309 FTA New Starts Criteria

The December 19, 1996 Federal Register Notice, ``Section 5309

(Section 3(j)) FTA New Starts Criteria,'' issued by the Federal Transit

Administration (FTA), is amended as follows:

The sentence reading, ``It is a net figure in the sense that travel

time increases should be explicitly considered and used to offset the

time savings of those people who experience savings,'' in regard to the

measure for ``mobility improvements,'' is stricken from the Notice.

The sentence reading, ``Total travel time savings will be valued at

80 percent of the average wage rate in the urbanized area,'' regarding

the measure for ``mobility improvements,'' is stricken and replaced

with the following:

``Travel time savings will be valued according to trip purpose,

using standardized values established by the Department of

Transportation, based on average national wage rates as reported in the

decennial Census. For transit riders, travel time will be valued at 50

percent of the wage rate for non-work travel (including commuting) and

100 percent of the wage rate for work-related travel. The total value

of travel time for transit riders will be calculated using a weighted

average by trip purpose. For highway users, the weighted average will

also include travel by truck drivers, based on vehicle mix. In

addition, time spent waiting for, accessing, and boarding transit

vehicles will be valued at 100 percent of the wage rate.''

The phrase reading, ``the value per year (forecast year) of the

forecast change in criteria pollutant emissions and in greenhouse gas

emissions, ascribable to the proposed new investment, calculated

according to standardized national assumptions

[[Page 60758]]

about the unit value of each emission,'' regarding the measure for

``environmental benefits,'' is stricken and replaced with the

following:

``[T]he annual forecast change in criteria pollutant emissions and

in greenhouse gas emissions, ascribable to the proposed new investment,

calculated in terms of tons for each criteria pollutant or gas.''

The sentence reading, ``This measure is not limited to stations

that are part of the proposed project, and includes boarding points

that will feed into the new system,'' contained in the discussion of

``mobility improvements'' with respect to the definition of ``boarding

points,'' is stricken and replaced with the following:

``Boarding points are defined as those transit stations located

directly on the proposed new start transit facility.''

In Section II(a)(3), the phrase ``for that part of the system that

will be directly affected by the proposed new investment'' is stricken

and replaced with the following:

``[F]or the entire transit system.''

Issue Date: November 5, 1997.

Gordon J. Linton,

Administrator.

[FR Doc. 97-29718 Filed 11-10-97; 8:45 am]

BILLING CODE 4910-57-P