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Transit officials to return $963,864 to FTA after grant drawdown error; city to temporarily cover reimbursement
Summary
Jackson Transit Services will return $963,864 to the Federal Transit Administration for draws made at an incorrect ratio during the COVID period; staff said the city initially pays transit bills from the general fund and is reimbursed by grants, and will reclaim the funds at the correct ratios once posted.
The City Council on May 6 authorized the mayor to issue a refund of $963,864.08 to the U.S. Department of Transportation Federal Transit Administration covering the period from April 4, 2020, to Jan. 22, 2022.
Christine Welch, transit services, explained the repayment is not a permanent loss of grant funds but a correction of an earlier drawdown: "We are not losing this funding. It's being returned to the grant because it was we drew it down at the incorrect ratio instead of a we do 80 20, 50 50. This was during COVID where we drew down at a %."
Welch said transit expenses are paid up front from the city's general fund and then the department draws grant reimbursements. Because some draws during the COVID period were made at incorrect percentages, the city will return the excess to the grant. Welch said the city already has eligible expenses that it will draw back to the grant at the proper ratios once the funds return to the grant account.
Council members pressed for clarity on whether the city had already spent the funds and who would cover the refund. Welch confirmed that the city had expensed funds and that the refund will come from the general fund; Transit will then seek to redraw eligible reimbursable expenses at the correct ratios. Several council members asked for Transit to provide more detailed budget accounting and for information on benches and rider amenities the department had requested in prior budget cycles.
The item passed with six votes in favor and one abstention. Councilman Stokes asked transit leadership to provide a detailed accounting of transit funds and requested a schedule for returning reimbursable amounts to the transit budget.
