Public transportation systems serving urbanized areas (UZA’s) exceeding 200k in population cannot use federal funds for general operating expenses – only capital expenditures and asset maintenance. While the 200k – population threshold is used elsewhere in transportation formulas, crossing this threshold always carries benefits (access to more federal money), except in transit. There are now over 110 small transit systems (operating less than 100 peak buses) across the country that have lost the flexibility on the use of federal funds because they serve areas over 200k – population. The 2010 census will place Laredo in the above scenario.

The manner in which the Commerce Department designates UZA’s is arbitrary and unfairly penalizes transit systems. Current law specifically states that UZA designation is not responsible taking into account the actual area being served by small transit systems. Transit systems may only service a fraction of the urbanized area, but still be bound by the population of the entire urbanized area. The “myth” was that when the population exceeded 200k, the transit system was large enough that the asset maintenance costs equaled the funds that used to be available for operating costs. The reality is that small transit systems operating less than 100 peak buses are generally lucky to have asset maintenance costs equal to 50% of the amount historically used for operating costs.

It is clear and logical that the use of federal funds should be based on the number of peak buses being operated and not an arbitrary factor such as population. There are many cases of transit systems serving areas under 200k population that have a higher number of peak buses, yet the use of federal funds is a local decision.

Under the current law, Laredo will lose the flexibility with the 2010 census, to use federal funds for operating purposes resulting in possible service reductions, more traffic congestion, more air pollution and more energy usage in these areas.

Support the Transit System Flexibility Protection Act of 2006, which will add an amendment to current law that allows operating costs of equipment and facilities for use in public transportation in an urbanized area with a population of more than 200k, if such public transportation system operates less than 100 buses on fixed-route service during peak service hours. This does not require any additional funding to the transit systems.

• Federal Transit Administration