Cash-strapped agencies can use FTA funds for fuel

Posted on April 12, 2012

Selected transit agencies in cash-strapped municipalities from coast to coast and Puerto Rico may now use certain Federal Transit Administration (FTA) funds to cover the cost of the gas, diesel and electric power that keeps buses, light rail, streetcars and other transit vehicles up and running.

The provision, part of Congress’ FY2012 appropriations legislation, allows transit operators in the most populated urban areas to use a portion of their allocated FY2012 FTA funds specifically for this purpose.

Thanks to this added flexibility, smaller cities across the nation will be better equipped to handle increased ridership and higher operating costs that typically result from rising oil prices. With a total of up to $100 million in funding nationwide, the program will not add to the deficit or increase government expenditures.

“As our economy continues to recover, we must ensure that Americans have reliable transportation choices that provide access to jobs and other vital services,” said U.S. Secretary of Transportation Ray LaHood. “Rising fuel prices impact the nation’s transit providers, too, and this measure delivers critical relief that will ensure that buses, light rail, and other vehicles are on the road at a time when their service is needed most.”

The flexible funding provision means that a large city like Houston, for example, where transit capacity is expanding rapidly, may apply more than $2 million in funds toward fuel and utility costs; Las Vegas may use more than $680,000 and Atlanta may use more than $6 million. The allocations are made in proportion to the funding levels these areas typically receive on an annual basis from FTA.

Under the provision, smaller cities can make their federal dollars go further as they do not need to match federal funds dollar-for-dollar, as was required in the past. For example, Panama City, Fla. may use nearly $140,000 to pay for fuel; Pascagoula, Miss. may use $25,000; and Sioux Falls, S.D. may use more than $190,000.

More than 175 urbanized areas in 40 states and Puerto Rico responded to FTA’s announcement published in the Federal Register on Jan. 11, 2012, requesting designated recipients to submit maximum eligible expenses for reimbursement. The total funding amount requested was $237.1 million. FTA has allocated a portion of the $100 million to every urbanized area that responded to the announcement.


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