Palmetto Breeze asks Port Royal for $84,007 match as transit funding shifts from rural to urban

Mary Lou Hepburn, finance director for the Lowcountry Regional Transportation Authority (doing business as Palmetto Breeze), asked the Town of Port Royal to provide an $84,007.34 local match to support a federal urban transit grant tied to the North‑of‑the‑Broad urbanized area.

Hepburn told the council that after the 2020 census parts of Beaufort County — including Port Royal and the city of Beaufort — were reclassified as urbanized. That change reduced rural grant funding and shifted some federal FTA funding into urban formulas, bringing municipal match responsibilities into play. "The fare pays 10 to 15% of the cost to operate," Hepburn said, explaining fares do not cover operating costs and that federal grants cover a much larger share of capital purchases than recurring operations.

Why it matters: As services move from rural to urban grant streams, local governments in the urbanized area become responsible for a greater share of operating and matching costs. Hepburn said capital purchases are typically 85% federally funded, while operating support is often reimbursed at about 50%, which increases local match obligations as service levels grow.

What was asked: Hepburn specified Port Royal’s requested share as roughly 18% of the local match — $84,007.34 — to pair with an operating grant and described a separate ~$28,000 local match that would leverage approximately $1,000,000 in capital grant funds for additional vehicles.

Context and constraints: Hepburn described a recent administrative change at the state level in which older unspent grants were reallocated; the authority reclaimed what it could and transferred capital-eligible funds into the urban area after learning a 2014–15 balance of about $853,729 had been labeled unspent. She also noted that Palmetto Breeze lacks independent taxing authority and that, under South Carolina rules, additional local funding sources beyond grants and local matches are largely limited to sales or property tax mechanisms administered by authorities that have taxing power.

Revenue and service notes: Hepburn said the authority supplements grant revenue by selling retired vehicles, limited advertising on buses (marketing discussions with Novant Health were underway), small special‑event contracts (which cannot compete with private charter operators), and interest on banked funds. She emphasized operational constraints — including the need for safe pull‑offs and shelters to run conventional urban loops — and that the authority plans to separate urban and rural routes so future ridership reporting will better reflect trips in the North‑of‑the‑Broad urbanized area.

Next step: Hepburn said the authority would return after separating routes to report ridership on urban routes. Council did not take a formal vote on the match request during the workshop.