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102 <br /> Mitigation Strategies <br /> Federal Oversight—All projects in the New Starts pipeline, including the D-O LRT Project, are subject to <br /> a robust Project Management Oversight program administered by the FTA.The FTA conducts Project <br /> Management Oversight reviews for major capital projects to ensure that the project sponsors have all <br /> the processes and procedures in place to effectively manage and deliver the promised benefits of the <br /> project on time, within budget, and in compliance with all applicable federal requirements and the <br /> project management plan. <br /> Oversight begins early in project implementation, and continues through construction to the end of <br /> disbursement of federal funds to the project. A Project Management Oversight Contractor (PMOC)was <br /> assigned to the D-O LRT Project in the fall of 2015. <br /> Over the past 18 months, the PMOC has reviewed extensive project management documentation, <br /> design plans, schedules, cost estimates, and other reports generated by GoTriangle for compliance with <br /> FTA guidelines and sufficiency for the entry to Engineering milestone. Based on its review and <br /> assessment of the D-O LRT Project, the PMOC recommended the D-O LRT Project for advancement into <br /> the Engineering phase. Once approved to enter Engineering, GoTriangle will continue to work with <br /> guidance from the FTA and the PMOC to move the project forward, secure federal grant funding, and <br /> successfully deliver the D-O LRT Project. <br /> A significant component of the Project Management Oversight program during the Engineering phase is <br /> the FTA-led Risk Assessments for the project, the first of which typically occurs within six months after a <br /> project's entry into Engineering. As part of its Risk Assessment, FTA will require GoTriangle to formalize <br /> a risk tracking plan, as well as to identify primary and secondary mitigation measures.The term "primary <br /> mitigation" refers to strategies that are performed in advance of a risk occurring, to reduce the <br /> likelihood or severity of the risk.The term "secondary mitigation" refers to strategies that are <br /> performed after a risk event occurs, to manage the effects.The PMOC will monitor GoTriangle's risk <br /> management efforts on a quarterly basis throughout the life of the D-O LRT Project. <br /> Mitigation Strategies for Financial Risks—This section describes mitigation strategies for the financial <br /> risks described in the previous section, which will form the basis for the financial portion of the risk <br /> mitigation plan to be developed early in Engineering.The strategies are organized in three primary <br /> categories: <br /> • Conservative budgeting(part A) <br /> • Cost reduction strategies that can be applied moving forward (parts B, C, and D) <br /> • Potential other revenues (federal and private)that GoTriangle will continue to seek (part E) <br /> Addressing the approximately$100 million YOE shortfall associated with the downside local sales tax <br /> growth rate (part 3 above)will require cooperation between project partners. It is important to note <br /> that project scope reductions do not directly reduce the shortfall on a dollar-for-dollar basis because the <br /> federal and state shares associated with that scope goes away. For example, eliminating$100 million <br /> YOE shortfall requires$245 million YOE in cost reductions, in the absence of new revenue. <br /> 5 <br />