Senate hearing examines $15 million one‑time grant and study to shore up fixed‑route transit funding

Senate Bill 2254, introduced in the North Dakota Senate Transportation Committee, would provide a one‑time $15 million appropriation to the North Dakota Department of Transportation (NDDOT) to award grants to the state’s four fixed‑route transit systems and fund a study to design a sustainable funding formula.

Senator Josh Beauche, the bill sponsor, told the committee the appropriation is intended to “bridge the biennium for a focused study” after federal reclassifications tied to the 2020 Census reduced some cities’ federal transit allocations. “Senate Bill 2254 proposes a one‑time appropriation to the North Dakota Department of Transportation by grants to the 4 communities with fixed‑route transit to assist with the growing costs and reduced funding that they are currently experiencing,” Beauche said.

The bill targets Fargo, Grand Forks, Minot and Bismarck, the four cities in North Dakota that operate fixed‑route buses. Transit directors from those systems, along with advocates and a NDDOT official, urged support at a committee hearing and described rising operating and capital costs, uncertainty in annual federal allocations, and local fiscal limits.

Dale Bergman, public transit director for the City of Grand Forks, said his agency’s combined fixed‑route and paratransit operating budget is about $3.5 million and noted ridership increases: “We are at all‑time highs in our ridership since 2013 … 282,270 rides in 2024 alone,” Bergman said. He described a funding mix that currently includes federal dollars (about $1.7 million last year), roughly 42% local support and a small state aid share; he said Grand Forks recently raised the local mill levy to 5 mills and approved a fare increase to help close gaps.

Minot Transit Superintendent Brian Areca told senators Minot moved from a rural to an urban federal designation after crossing the 50,000 market population threshold, which changed the federal funding model and made year‑to‑year allocations more volatile. He said Minot’s fixed‑route ridership was about 82,000 rides last year and warned that vehicle replacement costs have risen sharply; he cited a 50% increase in some bus prices over four years and said lead times after ordering can be 15–18 months.

Julie Baumelman, Fargo transit director, said Fargo’s total transit budget for 2025 is about $12.3 million and that federal reclassification reduced federal funding for the agency by about 17% when the city exceeded 200,000 population. She said fares make up roughly 10% of Fargo’s budget and that the city does not have a dedicated mill levy for transit: “Currently, the City of Fargo, we do not have a mill dedicated to transit,” Baumelman said. Fargo reported roughly 900,000 combined fixed‑route and paratransit rides last year; its plan projects returning toward pre‑COVID ridership of about 1.2 million rides.

Speakers said the $15 million figure was developed by the four urban providers to cover operating and capital matching needs over the next biennium and that it would cover an estimated three‑quarters of the gap the agencies face. Multiple witnesses emphasized that local matching requirements and federal formula factors — such as riders per mile and riders per hour — make budgeting unpredictable and can put local matches and potential federal funding at risk if local revenue or ridership fall.

Chad Orne, deputy director for planning at NDDOT, testified neutrally and urged the committee to note that federal rules require paratransit service where fixed‑route service exists. “49 CFR Part 37 Subpart F require public entities that operate a fixed route system to also provide a paratransit service for persons whose disabilities prevent them from using a fixed route,” Orne said; he recommended the committee ensure the bill’s intent encompasses both fixed‑route and the associated paratransit obligations.

Supporters from the advocacy community and individual riders described how transit connects people to work, medical appointments and other daily needs. Trevor Burnett, a transit advocate, urged lawmakers to treat the request as a need rather than a want and asked that advocates be included in any study design.

The committee closed the hearing after questions; no committee vote was recorded at the session. The bill proposal remains at the hearing stage and would proceed to appropriations if it receives a committee recommendation.

Ending: If passed, the one‑time grants and the study would be intended to cover operating and capital matching needs for the next two years while a funding formula is developed for future legislative consideration. The committee did not vote on SB 2254 during the hearing.