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Shift By Feds Could Tighten Transit Funds: Added Weight on Cost Effectiveness May Hit Future Bus, Rail Lines

Posted on: Thursday, 23 March 2006, 06:00 CST

By Richard Rubin, The Charlotte Observer, N.C.

Mar. 23--Tighter federal rules on transit funding now place more emphasis on the cost effectiveness of rail and bus projects, and that trend is causing concern in Charlotte.

CATS officials are reviewing the tougher requirements as they prepare to seek federal cash for mass-transit lines to Mooresville, University City, Matthews and west Charlotte.

The Charlotte Area Transit System scores well when the federal government looks at a broad array of factors, said CEO Ron Tober. CATS' projects are buoyed by solid local funding (from the half-cent sales tax) and aggressive plans for dense development (backed by local governments).

The federal changes don't affect Charlotte's light-rail line along South Boulevard, now under construction.

As CATS moves forward, however, that project's history is illustrative of what might happen next.

Cost-effectiveness ratings are based on a complicated formula that measures the amount spent to save one hour of travel time. For the south corridor, CATS calculated cost effectiveness at $22.73 per hour of travel time saved, and it received a "medium-low" rating from the Federal Transit Administration.

But "medium-high" ratings on land use and financing helped bring up the overall score, and the federal government committed to paying 47 percent of the $427 million cost.

Now, with dozens of cities competing for grants, the federal government won't give money to any new project without at least a "medium" cost-effectiveness rating, Tober told the Metropolitan Transit Commission on Wednesday. Even under new, inflation-adjusted guidelines, that number would have to go below $22 per hour to get a "medium" rating.

That specter hangs over CATS as it begins reporting the results of years of study on the four other corridors. That process starts next month, when CATS releases more details on the proposed commuter rail line to Mooresville.

Tober said that report should include three different cost-effectiveness ratings, depending on whether the line ends in Davidson, Mount Mourne or Mooresville. By the fall, transit officials will decide which projects to submit for federal grants.

Federal officials and CATS are debating the proper ways to measure costs and benefits. Tober noted that those calculations can be very sensitive to changes in assumptions about ridership and growth around transit stations.

For example, if CATS had used more ambitious economic growth projections around stations, the south line would have been comfortably in the "medium" range.

Richard Rubin: (704) 358-5832

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Copyright (c) 2006, The Charlotte Observer, N.C.

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Source: The Charlotte Observer (Charlotte, N.C.)

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