Light Rail Depends on Bus Funding

City Council’s budget not only guts DDOT bus service and the People Mover.  It also threatens the Woodward Light Rail project!

To get federal funding for Woodward Light Rail, the Federal Transit Administration requires that the city demonstrate its ability to fund both light rail and bus service for the next 20 years.

Federal Expectations

According to the the Federal Transit Administration’s New Starts planning website:

“The FTA evaluates the project justification and the local financial commitment according to . . . the ability of the sponsoring agency to fund operations and maintenance of the entire transit system (including existing service) as planned, once the project is built.”

Sec. 611.11  Local financial commitment criteria.

    In order to approve a grant or loan under 49 U.S.C. 5309, FTA must 

find that the proposed project is supported by an acceptable degree of 

local financial commitment, as required by section 5309(e)(1)(C). The 

local financial commitment to a proposed project will be evaluated 

according to the following measures:

    (a) The proposed share of project capital costs to be met using 

funds from sources other than the section 5309 new starts program, 

including both the non-Federal match required by Federal law and any 

additional capital funding (``overmatch''), and the degree to which

planning and preliminary engineering activities have been carried out 

without funding from the section 5309 new starts program;

    (b) The stability and reliability of the proposed capital financing 

plan for the new starts project; and

    (c) The stability and reliability of the proposed operating 

financing plan to fund operation of the entire transit system as 

planned over a 20-year planning horizon.

 

The Transit Cooperative Research Program (sponsored by the Federal Transit Administration) says in its Legal Handbook for the New Starts Process (pdf, page 27):

FTA’s FMOC reviews the general financial condition of the grantee and its nonfederal funding entities and the financial capability of the grantee and its nonfederal funding entities. 

Financial condition includes historical trends and current experience in the financial ability of the grantee to operate and maintain its transit system at present levels of service. Financial capability refers to the stability and reliability of revenue sources needed to meet future annual capital and operation and maintenance costs. Financial capability considers the nature of funds pledged to support operating costs and capital replacement programs, as well as forecasted  changes in fare and nonfare revenue. Capital costs include both replacement and rehabilitation of existing equipment and facilities as well as new investments. Operating and maintenance costs include those for the existing system, as well as increases due to capital investment and service expansion.

FTA will not enter into an FFGA until the plans for financing the project have been completed and the Financial Capacity Assessment has been performed by the FMOC. The plans must demonstrate that the project sponsor can complete the FFGA project and continue to operate its existing service with available resources.