Track C: Leveraging Financial Resources

Richard Steinmann, Director, Office of Policy Development, Federal Transit Administration

From FY 1998 through FY 2003, a total of $36 billion of funding is guaranteed to various transit funds. Over the six year ISTEA period, the share of transit authorizations actually appropriated has increased, and TEA-21 continues this trend. The following are key transit programs and provisions:

• Formula Grants -- Formula grants are made to recipients, which are generally transit operators, based on population. Under TEA-21, $19.97 billion is distributed through formula grants. The grants are distributed primarily to urbanized areas (88.61 percent); non-urbanized areas, with populations under 50,000 (6.19 percent); and programs for the elderly and persons with disabilities (2.33 percent).
• Capital Investment Programs -- Capital Investment Programs are funded under TEA-21 at $18.32 billion. Capital Investment Programs are split into three categories: 40 percent for New Starts (generally new light rail, heavy rail, and high-occupancy vehicle facilities); 40 percent for Fixed Guideway Modernization; and 20 percent for Bus. There are also additional general funds under TEA-21 in the amount of $3.09 billion available for these three capital funding categories.
• Planning Program -- TEA-21 authorized $534 million for planning, which is distributed to Metropolitan Planning (82.72 percent); and Statewide Planning (17.28 percent). Additional general funding has been appropriated totaling $170 million. FTA planning funds are consolidated with FHWA planning funds at the state and local level, so that grantees may administer these as one program.

Capital investment programs may be relevant to TCSP grantees primarily at the implementation stage of major transportation projects, rather than as a leveraging mechanism for TCSP grants. TCSP projects, however, can complement the goals of transit investments by creating land use and transportation patterns that support the transit investment. Supportive land uses and policies are an important consideration in rating applications for New Starts funding.

The Transit Enhancements Program is particularly well suited for TCSP projects, to make communities more livable through transit. It provides for improvements to facilities to make transit more attractive to riders. Eligible enhancements include historic preservation including operation of historic transit buildings and facilities; bus shelters; landscaping; public art; pedestrian access; bicycle access; connections to parks; signage; and enhanced access for disabled persons. Transit providers in areas over 200,000 population must use at least one percent of their apportionment for transit enhancements. Transit providers in these areas have to spend the funds within four years of the date of their apportionment.

Some TCSP projects involve the development of transit facilities or transit-related facilities. For such projects, grantees should be aware that FTA has recently changed its policies on joint development and codified them in a program-wide definition of capital. Joint development projects must be physically and functionally related to transit, and the projects must produce a fair share of revenue. This revenue can be used for any transit purpose. TEA-21 states that safety and security facilities and equipment are eligible capital expenses. These can include community facilities such as daycare and healthcare facilities. FTA can pay for the "shell" of a building used for revenue producing activities, but not for the activities themselves (such as building interior office or retail space).

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