Federal Funding Update
Dear ODOT transit partners,
I want to inform you of a change that ODOT is implementing with the recent and upcoming federal grant awards. ODOT recently announced more than $18 million in 2024-2026 Mid-Cycle discretionary grant awards and the opening of the 2025-2027 Federal Formula applications. We are excited to announce these awards and assist Oregon transit agencies in accessing federal funds to deliver transit across the state.
As you know, the Public Transportation Division (PTD) awards federal transit funding and makes payments to subrecipients on a reimbursement basis. PTD will authorize payment for eligible subrecipient expenses after the federal grant has been fully executed by PTD and the Federal Transit Administration (FTA) and those funds are available for drawdown. This is consistent with ODOT policy, and it’s a change from previous solicitations.
A subrecipient can begin incurring eligible expenses once ODOT and the subrecipient have signed their grant agreement, as usual. The subrecipient will need to cover these expenses until federal funds are available for reimbursement.
Why has ODOT made this change? We need to ensure that our federal funding reimbursement process is sustainable. We submit grant applications to FTA once the solicitation process is complete and award amounts are determined. Our policy is to provide funding once FTA grants are executed and federal funding is available, except as approved by the Division Administrator. However, over a number of years, it was our practice to reimburse agencies for eligible expenses before FTA grants were executed. This practice was possible because we had funding on hand to provide this interim funding. Because of a delay in processing FTA grants, the amount of federal awards has outgrown the funding we have on hand to cover reimbursements.
We are working with the FTA through applications from prior solicitation cycles. We have experienced slow federal grant processing times, and at the same time, decreased interim funds that can be provided while we wait for federal funds to come in. As such, ODOT will distribute reimbursements once the FTA grant has been executed or the contract is signed, whichever is later.
This may impact when you can expect reimbursements for federal grants, with both Mid-Cycle grant awards and 2025-2027 Federal Formula grants expected to be available between fall 2025 and spring 2026. Mid-Cycle grant subrecipients received letters with more details.
We recognize that these timelines may impact your agency and the communities you serve. Our agency has dedicated additional staff resources to this process and the team is working closely with FTA to prioritize our grant applications. We will work to make funding available as soon as possible.
I want to stress that these changes do not impact the Statewide Transportation Improvement Fund (STIF) grant cycles. This change only applies to federal grant funding.
Please reach out to me or your Regional Transit Coordinator if you have questions. Here is a link to a Frequently Asked Questions document on our website that provides more information.
Sincerely,
Suzanne Carlson
Public Transportation Division Administrator
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