Memorandum

City of Lawrence

Transit System

 

TO:

Jonathan Douglass, Management Analyst

 

FROM:

Cliff Galante, Transit Administrator

 

DATE:

October 18, 2006

 

RE:

Transit System Funding

 

 

 

The majority of the Federal grant funding the Transit Department receives is through the Federal Transit Administration.  This funding is provided to the City annually through a formula that is based partly on population.  Since the City has a population greater than 50,000, Lawrence is considered an urbanized area.  As such, the City is the designated recipient of FTA Section 5307 Urbanized Area Formula Program funding.  The funding levels are dictated through the Federal transportation bill which authorizes federal transit and highway programs through Fiscal Year 2009.  The new bill was signed into law by President Bush on August 10, 2005 is called SAFETEA-LU which stands for the Safe, Accountable, Flexible, Efficient Transportation Equity Act – A Legacy of Users.  SAFETEA-LU builds on the success of two previous surface transportation authorization laws, ISTEA and TEA-21.  Under it, the federal transit program structure remains largely the same, retaining formula programs that target federal investment to systems and communities based on need and capital investment programs that address special needs and projects.

 

The new bill meets these goals:

  1. Provides a record level of federal transit investment, $52.6 billion over 6 years, an increase of 46% over the amount guaranteed in TEA-21;
  2. Increases annual guaranteed funding form a level of $7.2 billion in FY2003 (the last year of TEA-21) to $10.3 billion in FY 2009;
  3. Retains annual funding guarantees to ensure long-term funding stability; and
  4. Improves program delivery.

 

In FY05 the City received $1,221,000 in Section 5307 formula funding under TEA-21.  With SAFETEA-LU, the Section 5307 formula funding the City receives annually increases:

FY06 - $1,334,512 (Actual)

FY07 - $1,405,503 (Estimated)

FY08 - $1,524,230 (Estimated)

FY09 - $1,621,358 (Estimated)

 

Section 5307 funding can be used for operating, capital, preventative maintenance, program administration, planning, and training expenditures.  Capital, planning and preventative maintenance transit expenditures require 20% local matching funds.  Operating expenditures require 50% local matching funds.  Note: Federal funding does not cover operating expenditures for communities with 200K+ population.  Since Lawrence is less than 200K in population we utilize much of the formula funding received to pay for operating expenditures.

 

Under SAFETEA-LU a new source of formula funding program has been established for which the City is eligible.  This source of funding is called Small Transit Intensive Cities (STIC) Section 5336(j) funding.  SAFETEA-LU creates a tier in the Urbanized Area Formula program that would distribute funds to small UZAs with fewer than 200,000 population that provide transit service above a certain level.  The new tier will be funded at 1% of all UZA formula funds annually beginning in FY2006.  The STIC criteria are passenger miles traveled per vehicle revenue mile; passenger miles traveled per vehicle revenue hour; vehicle revenue miles per capita; vehicle revenue hours per capita; passenger miles traveled per capita; and passengers per capital.  For each STIC criteria obtained based on prior year operating data submitted into the FTA’s National Transit Database a community or transit agency can receive an additional $130,001 in funding to a maximum of $780,006.  Lawrence currently meets one of the STIC criteria and that is why our funding has increased from FY05.  If coordination with KU occurs the City very likely could obtain each criteria.  STIC funding can be used for operating, capital, preventative maintenance, program administration, planning and training activities. 

 

Other sources of funding though in small amounts less than $100K are Job Access Reverse Commute (JARC) formula funding and “New Freedoms” funding to improve service for individuals with disabilities.  Both these programs require 50% local match or can be matched with other Federal “Non-DOT” funding.  In order to receive JARC or New Freedoms funding the City would first be required to work with other human service agencies to develop a Coordinated Human Service Plan.  Upon completion, it is my understanding that the City would submit grant applications to KDOT.  Actual funding levels could fluctuate year to year.  Pursuing these funds is difficult because they would be tied directly to operations.  For example, if the City decides to put additional service on the road and then future funding is cut, the City would either have to decide to cut back the service or fund the additional service entirely with local funds.  The Technical Advisory Committee for the Lawrence/Douglas County MPO has recommended that the City does not pursue JARC or New Freedoms funding at this time.  In addition, the Federal Transit Administration is current working out the details on how these programs would work and be administrated.

 

Another source of Federal funding the City receives is FTA Section 5309 Bus and Bus Facilities Program for capital investment.  This source of funds requires a 20% local match.    SAFETEA-LU makes few changes to the program, but provides significant increases in funding.  Some 600 earmarks are included in this section under SAFETEA-LU; these earmarks cover about half of the available Bus and Bus Facilities program resources in each fiscal year through FY2009.  That means Lawrence has the opportunity to pursue obtaining the remaining funds that are available annually under Section 5309 through the earmark process by working the Kansas Congressional Delegation.  In prior years, the City has been successful in obtaining Section 5309 earmarks.  The City in past years has received, $388,711 in FY05 and $491,839 in FY03 in Section 5309 funding to be used towards the design and construction of Bus Maintenance/Administration building.  This year for FY07 (Federal Fiscal Year) the City submitted 3 earmark requests under FTA Section 5309 “Bus and Bus Facilities”.  Those were the following:

 

  1. Bus Maintenance Facility (Land Acquisition/Construction) in the amount of $4,340,000(Federal Share)/$5,425,000 total project amount (Overall project development cost anticipated to be $7M) $1,280,550 in Federal funds have already been obtained to put towards this project;
  2. Fixed-Route Bus Acquisition/Replacement in the amount of $3,088,000 (federal share)/$3,860,000 total project amount;
  3. Bus Acquisition for Coordinated Transit System (30 buses at $330,000 each) in the amount of $7,920,000(Federal Share)/$9,900,000 total project amount.

 

According to initial information received from Congressman Dennis Moore’s office the City should receive $250,000 earmark for FY07.  However, according to recent information provided by the lobbyist working for the Kansas Public Transportation Association, he anticipates that all earmarks will be cut in half.  As such, the City of Lawrence should expect $125,000 for a “Bus Maintenance Facility”.  Currently, the City is in the process of working with Congressman Moore’s office on revising the language to read “Bus and Bus Facilities” to provide greater flexibility with the use of those funds should they be officially authorized.

 

Another source of Federal Funding the Transit Department has received in the past is Section 115 funding in the amount of $400,000 that is being used for the Bus maintenance facility for the feasibility study and design.  This funding does not require a local match.   Earlier this year I met with the entire Kansas Congressional Delegation individually in their Kansas offices and in Washington, D.C. as part of the Kansas Public Transportation Association to inform them about the status of the City’s transit system and accomplishments.  I also met with them to discuss goals and needs. 

 

Administration of these grant programs and compliance with Federal requirements is extremely time intensive making up the majority of my department’s staff time.

 

The City also receives transit funding from the State of Kansas Department of Transportation through the Comprehensive Transportation Program (CTP).  The funding amount received is based on a formula that was determined in 1999 during the program’s inception and two years prior to the establishment of the Lawrence Transit System.  CTP annually provides $6,000,000 to transit agencies throughout the State.  59% or $3,540,000 currently is divided between five urban transit systems with the remaining 41% or $2,460,000 being split between among the rural transit systems throughout the state.  The amount of CTP funding Lawrence receives annually is $250, 986, the lowest of any urban transit system in the State of Kansas.  This funding is used to help pay for the transit system’s capital and operating expenditures, as well as the majority of marketing and community outreach activities.  At this time, the Transit Department is involved in discussions with other urban transit systems to evaluate the current CTP funding formula and develop one that is more equitable.  CTP is set to expire in FY09.  Currently, KDOT is in the process of working towards getting this program renewed.