-2

A great deal of effort and cooperation have been undertaken by
participating agencies in the Washington metropolitan area to
make possible this significant step toward completion of the
regional Metrorail system: congratulate you and all who
participated and look forward to expeditious implementation
of the project with you.

The cash drawdown schedule for the disbursement of funds to complete contract commitments is estimated to be as follows:

NOTE: Distribution of these costs by contract section is detailed in Exhibit A of the final project application, dated September 11, 1975.

APPROVED PROJECT BUDGET

September 1975

Project No.

IT-23-9001

Washington Metropolitan Area Transit Authority

and Government of the District of Columbia

Project budget items and corresponding cost estimates are as follows:

November 18, 1975 Request

No. 15

Submit documentation of your consultations with UMTA regarding
the capitalization of rail start-up costs.

Extensive discussions have been held with key UMTA staff relative to capitalization of rail start-up costs. These start-up costs involve pre-operation testing and training. The basis for the estimates were provided, indicating the length of training for rail employees and the extensive nature of the test program to assure safe and reliable operations (similar to data provided the Committee in this set of questions). UMTA has stated that they will make a decision within the

next several weeks. tion will be on an 80 percent Federal/20 percent local basis, using funds from the highway transfer program. If the decision of UMTA is not favorable, funding for capitalization will continue to be from the Federal grant on a two-thirds Federal, one-third local basis. Thus, the UMTA decision on capitalization will determine whether one-third local funding or 20 percent local funding will be applied. Adequate funding under the two-thirds/onethird grant program are available for capitalization of start-up costs.

If the decision is favorable, funding for capitaliza

With the approval last October of a substitute transit project for
Metrorail construction under Interstate transfer provisions of recent
highway legislation, new hope was generated for completion of the
regional system. Your personal role, and that of Mayor Washington,
was essential in the local decision to use these highway funds
for transit.

The opportunity now exists for all governments within the Washington
metropolitan area, through the Interstate transfer process, to
provide for sustained Metrorail construction. The use of these
Interstate transfer funds will bring the Urban Mass Transportation
Administration more closely in touch with the project, and I look
forward to working closely with the WMATA Board and staff to ensure
continued progress on the Metrorail System.

The WMATA staff has requested guidance on a number issues that involve
UMIA because of the use of Interstate transfer funds. I am writing
to discuss our position on each of these points.

1.

Contract reviews for Part A grant. We have arranged to meet
on February 2, 1976 with the WMATA offices of Engineering
and Program Control to complete our review of all contracts
included in the scope of the approved grant. In this meeting
we will want to discuss further the opportunities for cost
reduction in underground construction for Metrorail segments
contemplated for future Interstate transfer grants. A

number of these opportunities have been identified by the Department's
Transportation System Center as it assisted in our review of

the Part A contracts.