U.S. Department of Transportation

Federal Transit Administration

Arizona, California, Hawaii, Nevada, Guam, American Samoa, Northern Mariana Islands

201 Mission Street
Suite 2210
San Francisco, CA 94105-1839
415-744-4726 (fax)

SEP 17 2004

Mr. Peter Cipolla
General Manager
Santa Clara Valley Transportation Authority
3331 North 1st Street, Building C
San Jose, CA 95134-1906

Re: Silicon Valley Rapid Transit Corridor Project and FTA comments on the Draft Environmental Impact Statement

Dear Mr. Cipolla:

In a letter dated May 21, 2004, the Environmental Protection Agency (EPA) raised concerns about the Santa Clara Valley Transportation Authority's (VTA) Draft Environmental Impact Statement (DEIS) for the Silicon Valley Rapid Transit Corridor (SVRTC) project. Specifically, EPA noted that the SVRTC project and the Bay Area Rapid Transit District's Warm Springs Extension (WSX) are connected actions, as defined by the Council on Environmental Quality's regulations (40 CPR 1508.25) and recommended that the SVRTC project should not proceed ahead of the WSX project. FTA believes that completion of the National Environmental Policy Act (NEPA) review of the SVRTC project prior to the completion of the NEPA review of the WSX project would preclude an objective analysis of the WSX project.

To resolve this situation, FTA intends to cease Federal action on the SVRTC project until a Record of Decision has been issued on the WSX. During this suspension of Federal action, FTA will not obligate any additional grant funds for SVRTC project activities. VTA may continue to use other available resources to address issues and comments received during the recent public and interagency review of the DEIS. This suspension of Federal action does not remove the project from Preliminary Engineering (PE) status in VTA's New Starts pipeline, nor does it exempt the project from FTA's evaluation of its transportation justification and its local financial commitment for the FY 06 Annual Report on New Starts.

As you are aware, FTA approved the SVRTC project into PE in September 2002, noting that concerns regarding (1) the travel demand model and resulting technical analysis used during the Alternatives Analysis, and (2) the operating financial plan and the ability of VTA to operate and maintain the existing bus and rail transit system during the construction and operation of the proposed major capital investment would have to be addressed during this phase of project development. Since that time, VTA has demonstrated very little progress in addressing these concerns, resulting in the current "Not Recommended" rating. We were disappointed that VTA did not take FTA's advice to identify a minimum operable segment, and instead chose to reduce the number of stations along the alignment. Unfortunately, this attempt to reduce project costs generated only modest savings, resulting in a proposed investment that continues to have one of the highest capital costs of any fixed-guideway project in FTA's New Starts pipeline. The situation is especially troublesome considering the poor financial condition of VTA, and the unusually high level of New Starts funding (approximately $900 million proposed).

FTA is committed to assuring that the New Starts pipeline contains projects that demonstrate steady progress and are likely candidates for the consideration of a Full Funding Grant Agreement. Towards that end, FTA will work with you to identify several milestones within the project's development schedule that must be met as a condition for maintaining PE status for the SVRTC project. We will work with you and your staff on developing these milestones and conditions in the coming weeks.

If you have any questions about this letter please feel free to contact me, at (415) 744-3133.


Leslie T. Rogers
Regional Administrator

copy to:

Lisa Rae, EPA
Tom Margro, BART
Steve Heminger, MTC