4.3. SR 06-16-2003 - Laserfiche WebLink

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In the letter from Representative Krinkie, the Federal Transit Administration (FTA) New Starts Report on Northstar is quoted out of context. After stating that economist Paul Anton overstated the benefit/cost ratio of the Northstar project by using a lower discount rate than the FTA, the letter states: "This is why the FTA said the following when they rated the Northstar project as 'Not Recommended' in their most recent New Starts Report: 'However, FTA has serious concerns about the information submitted for this measure; the underlying assumptions used by the project sponsor may have produced an inaccurate representation of the benefits of the project.'" The FTA's rating of"Not Recommended" for Northstar has nothing to do with Mr. Anton's figures. As that same FTA reporti says on page A-338: "The Not Recommended rating is primarily based on the inability of the project sponsors to obtain a local financial commitment to construct and operate the proposed project." This is because the State of Minnesota failed to commit its share of the capital funding for the Northstar project in the 2002 legislative session. The quote from the New Starts report regarding the benefits of the project refers to a completely different project measure. That project measure was computed long before Mr. Anton conducted his economic study of the project. The project measure in question is a new criterion used by the FTA to compare projects, and is called the Cost per Transportation System User Benefit, or just User Benefit for short. The User Benefit describes the cost for a given project to save an hour of a traveler's time. Because it was the first time for this measure to be computed for transit projects across the country, the FTA hired consultants to compute the measure for all projects. FTA's consultant determined in September 2002 that Northstar would save travelers 11,646 hours per day resulting in a User Benefit of $7.28/hour. Because this equates to over one hour per Northstar passenger trip per day, the FTA rightly questioned if this could be correct. In other words, the FTA is questioning the software model and its assumptions as used by its consultants in determining this User Benefit. With the results in question, the FTA then issued a "Not Rated" mark for the Mobility Improvements category of the Northstar project, which inclUdes the User Benefit measure. The above quote from the New Starts report refers to the User Benefit measure of the project, not to any Benefit/Cost work. It is misused in the letter. The project intends to address the FTA's questions about the User Benefit when funding is available to hire consultants knowledgeable in the new measure. ~ Annual Report on New Starts, Proposed Allocations of Funds for Fiscal Year 2004; Report of the Secretary of Transportation to the United States Congress Pursuant to 49 U.S.C. 5309(o)(1); Prepared by the Federal Transit Administration, 2003; Report Number FTA-TBP10-2003-02