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Cities press for steady transit funding as federal formulas and reclassifications bite
Summary
Transit directors told the committee that volatile federal formula allocations and recent FTA reclassifications have made year‑to‑year funding unpredictable, and asked the legislature to consider a steady state aid approach to support fixed‑route urban systems.
Representatives of fixed‑route transit systems in Fargo, Grand Forks, Minot and Bismarck‑Mandan urged the Government Finance Committee to develop a stable state funding approach to reduce year‑to‑year volatility created by shifting Federal Transit Administration formulas and population reclassifications.
Derek Pfeiffer of the North Dakota Department of Transportation summarized federal program rules and eligibility. "The Federal Transit Administration classifies transit providers into rural, small urban and large urban categories," Pfeiffer said, and he described how 5307/5340, 5310, 5339 and 5311 programs differ in eligible uses, suballocation practices, and matching requirements. He said federal programs allow capital match rates up to 80% (85% for certain ADA vehicle purchases) while operating assistance caps and eligibility vary by provider classification.
Transit officials described how reclassification and formula volatility affect local budgets. Brian Harica (Minot City Transit) said that Minot’s transition from rural to small urban status brought new complexity and funding unpredictability and that replacement buses have sharply increased in price (an example cited: $455,000 for a 30‑foot bus in 2021 versus a current estimate of about $702,000). Julie Bommelman (Fargo) said Fargo lost about 17% of 5307 funds after reclassification and stressed that state funds can be used as match to unlock more federal dollars.
Operators asked the committee to consider a funding approach that provides a base allotment plus per‑ride or per‑system addenda to recognize differences between systems. Minot and Grand Forks argued a hybrid formula — base support to preserve minimum service plus ridership‑based supplements — could stabilize operations and preserve rural support while acknowledging urban needs.
Why it matters: fixed‑route systems provide essential transportation for work, school and medical access; funding instability can force localities to cut routes, reduce hours or delay capital replacements.
What’s next: DOT and committee staff will gather comparative models from other states, analyze how state aid can be structured to act as an effective federal match, and return with options for formulas and cost estimates.
