Wednesday, July 2, 2014

Colorado reports impact to transit providers across the state, if MTA Implodes

Transit Agencies in Colorado
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The following article was written by Elena Wilken, Executive Director at the Colorado Association of Transit Agencies (CASTA).

As you know, the Mass Transit Trust Fund is scheduled to implode later than the Highway Fund.  
Most of my national and state contacts are taking the "well, Congress will have to fix the Highway Trust Fund before the Mass Transit Account, so we will just stick our heads in the sand and hope for the best."  Not my preferred advocacy strategy, but the explanation below may help provide context. 
When pushed, CDOT admits the scenario in Colorado is not imminently bleak, but would get rougher the longer funding was diminshed.  CDOT administers the 5311 rural formula transit program and 5310 elderly and disabled program for rural and small urban communities.  They are already fully funded through December 2014 for all the contracts. 

For 2015, the Transportation Commission typically lends funding to the Transit Division in October, so that the Transit Division can begin the contracting process before the money is in hand (as per state law).  Should the Commission decide not to take action this year, being unsure if the federal funding will come to reimburse the loan, then the Transit Division would have to delay contracting until Congress passes the FY2015 Appropriations bill.   
As you have seen, this could happen as late as February or March of the following year.  This would delay contracting by several months, which is very difficult for small agencies with tight cash-flow.  However, CDOT also has set aside 10% of the funding for capital - in a pinch, this money could be funneled to contracts that fund operating.  Colorado also received additional funding last year due to the inclusion of vehicle miles in the rural formula.  This money came too late to be part of the current grant cycle, and so could also be used to cover operating deficits in the hopes that congress takes action sometime next year. 
Should the worst come to pass and the federal trust fund actually is only able to pay out what is coming in, I have heard from several sources that the FTA is talking about  spreading the impact across all programs, rather than targeting any one program specifically. 

This means that the systems that are most reliant on federal funds are the ones most at risk. We are very fortunate in Colorado that agencies rely on average for federal funding for just 25% of their operating funding.  I would foresee agencies shifting local funding from capital to operating in the hopes they could maintain service until the federal funding situation is resolved. 

Certainly the small operators that use 5311 and 5310 funding and are already operating on the margins would be impacted as soon as CDOT exhausts its ability to cover the gap. This could happen as early as next summer if nothing happens at the federal level.  As you know, the larger urban systems only use their federal funds for capital, so they could go on paying salaries and fueling their buses for a while.

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