County staff warns federal grant uncertainty could delay dozens of transportation projects

Montgomery County transportation staff warned the Transportation and Environment Committee on Monday, March 3, that uncertainty over federal grant execution is creating delays and risk for projects in the county’s FY25–30 Capital Improvement Program (CIP).

The county identified 18 federal grants embedded across transportation projects, totaling about $67 million, of which six have been executed and account for roughly $21 million, according to county staff. Several large awards also figure in the CIP: a recently closed $104 million grant for the I-355 crossing at the Medical Center Metro station and a $135 million Small Starts amount programmed for the Veirs Mill Road Bus Rapid Transit project that remains at the award-notice stage.

Why it matters: Many projects in the CIP assume federal or state-administered federal funds. If grants are not signed or are delayed, projects that county staff planned to advance with those awards will be deferred or paused. That can affect timing for design, right-of-way acquisition and construction across a range of projects from bus procurement to station access and arterial improvements.

County staff described a range of grant statuses. Director Conklin said some grants are executed and work is advancing on those, but for others “we don’t know the prognosis for grant signature,” and the county is holding off on contract executions until federal signature and related state/regional approvals are secured. The county also noted procedural delays tied to required state and regional plan amendments (TIP) and additional federal review since the change in federal administration.

Staff framed the exposures by age and type. Some awards are relatively recent (months old); others date to early competitive rounds in 2022 and are still awaiting execution, in part because of outstanding Buy America compliance or unresolved design coordination with partners (for example, WMATA for the North Bethesda Metro northern entrance).

Staff singled out two major transit projects that rely heavily on federal discretionary funding: Veirs Mill Road BRT (an $8.1 million project development grant and a $135 million Small Starts request) and the 355 BRT project (project development underway with $25 million programmed but not yet awarded). The county also cited reliance in part on an existing $13 million grant for hydrogen fueling to support bus procurement projected in several projects.

Committee members asked how the county will respond if grant awards are rescinded or remain unsigned. Gary Malvin of the Office of Management and Budget noted a reduced fiscal capacity across the CIP (including approximately $70 million lower impact tax estimates compared with last year’s CIP) and emphasized that many of the projects that were candidates for deferral are large county-funded items that do not address immediate safety concerns.

County staff said they will not begin contract work tied to discretionary grants until they receive signed award agreements. For projects where federal funding was intended only to enhance an existing county program (for example, bus stop improvements), staff said the county retains a baseline capital program funded by bonds and could pursue county-funded work if necessary, but they could not give a firm timeline for when they would return to the Council with formal amendments if grants do not materialize.

Looking ahead: Staff said they are monitoring 18 embedded federal grants in the CIP, tracking execution status and will report back if awards are rescinded or not executed. The committee was told additional CIP amendments tied to operating-budget actions could be transmitted in coming weeks as the county refines its fiscal capacity.