Public Transit: Information on Job Access and Reverse Commute Activities after 2012 Statutory Changes
Released: 2017-05-04T00:00:00

Letter

Background

Public transportation provides many groups with wide-ranging benefits. Those served include transportation disadvantaged populations, such as “low-income individuals”. Congress created the JARC program in the 1998 Transportation Equity Act for the 21st Century (TEA-21) to support national welfare-reform goals, including helping adults meet new work requirements to receive federal assistance. A purpose of the program was to improve low-income individuals’ ability to access jobs and job- related needs by providing grants to states and localities for the provision of additional or expanded transportation services. Under TEA-21, JARC was a discretionary program, with projects selected by FTA for funding through a competitive process or congressionally designated for funding. Figure 1 provides a timeline of subsequent surface transportation authorizations that affected the program.

In 2005, the Safe, Accountable, Flexible, Efficient Transportation Equity Act —A Legacy for Users (SAFETEA-LU) changed JARC into a formula program. FTA apportioned dedicated program funds to states for projects in small urbanized and rural areas, and to large urbanized areas, based on a statutory formula. State transportation agencies were required to be JARC designated recipients for small urbanized and rural areas. Designated recipients for large urbanized areas include major transit agencies and metropolitan planning organizations. SAFETEA-LU also required that designated recipients develop and conduct a competitive selection process for their projects, and competitively allocate funds to subrecipients. After projects were selected, designated recipients had to apply to FTA to fund the projects. FTA awarded grants to designated recipients and funds were obligated at the time of award. Figure 2 below provides an overview of the JARC grants process under SAFETEA-LU. Program-eligible activities included, among others: late-night and weekend transit service, expansion of fixed-route public transit routes (e.g., bus routes), ride-sharing activities, local car loan programs, or capital expenditures such as vehicle purchases to support a transit service. In fiscal year 2012, the last year before the program was consolidated, FTA apportioned approximately $176.5 million to urbanized and rural areas. Funds were available for obligation for 3 years from the time of apportionment. JARC funds remain subject to the program requirements that were in place at the time the funds were apportioned.

In 2012, the JARC program was one of several FTA grant programs that MAP-21 changed or did not renew. Specifically, the statute consolidated eligible JARC activities into the existing Urbanized Area Formula Program (urban transit program) and Formula Grants for Rural Areas Program (rural transit program). Eligible activities of the consolidated urban and rural transit programs are as follows.

Urban transit program: In addition to providing funds for eligible JARC activities in urbanized areas, this program provides funds for activities including: (1) planning, certain operating costs, engineering, design, and evaluation of transit projects and other technical transportation-related studies; (2) capital investments in bus and bus- related activities; and (3) capital investments in new and existing fixed-guideway systems including, but not limited to, rolling stock, overhauling and rebuilding of vehicles, and communications.

Rural transit program: In addition to providing funds for eligible JARC activities in rural areas, this program provides funds for activities including: (1) planning; (2) capital expenses for the acquisition of buses and vans or other paratransit vehicles; (3) preventive maintenance, vehicle rehabilitation, remanufacture, or overhaul; and (4) operating expenses directly related to system operations We have previously noted that consolidation was seen as a means of continuing the goals of the program while offering greater efficiency and flexibility, including decreasing administrative burdens, to recipients.

FTA Issued Guidance and Conducted Outreach to Communicate That JARC Activities Remain Eligible for Federal Funding

FTA communicated changes that MAP-21 made to public transportation programs, including the JARC program, to designated recipients through program guidance and outreach. Initially, FTA issued a Federal Register notice regarding FTA transit program changes in October 2012. The notice provided interim guidance and emphasized that under MAP-21, activities that were funded through the former JARC program are eligible under the urban transit program and the rural transit program. The notice also stated that there is no set-aside or spending cap on JARC activities.

After the 2012 consolidation, DOT applied all of the JARC eligibility requirements and existing activities in the urban transit program and rural transit program. For example, FTA officials explained that they incorporated a unique aspect of grantee eligibility under the JARC program—the eligibility of private nonprofit organizations as sub- recipients—in the urban transit program. FTA issued circulars with the final MAP-21 program guidance in 2014. The circulars reiterated that there is no limit to the amount of allocated and unobligated formula funds that can be used for JARC activities until Congress rescinds or redirects the funds to other programs, and outlined the eligibility requirements for these activities.

As part of its outreach to funding recipients, FTA held webinars highlighting new and consolidated programs under MAP-21, and the JARC program was among the programs covered. Additionally, FTA officials stated that headquarters and regional FTA officials made themselves available through conferences, or other means such as telephone calls or e-mail, to answer questions or concerns regarding the consolidation and its potential impacts on JARC activities. Selected recipients we spoke with said they found out about changes to the JARC program through FTA webinars or designated JARC recipients.

Of the 19 selected designated recipients we interviewed, a majority (12 of 19) said they found out about the JARC consolidation primarily through webinars and FTA’s summer 2012 conference. Some also reported they viewed their contact with FTA officials as a useful resource as they navigated the program changes. For example, an official with the Texas Department of Transportation said he found FTA staff to be the most important resource during program changes, because the staff was available for questions and feedback. Furthermore, this official told us that his agency had meetings twice a year with subrecipients, and FTA staff joined those meetings to assist in answering a range of questions or concerns, including those on JARC activities, from subrecipients.

Of the 15 selected subrecipients we interviewed, about half (7) reported finding out about the JARC program changes through their state’s transportation agency or other designated recipient. For example, an official with a Mississippi subrecipient said it found out about the JARC consolidation and its implications at the annual workshop held by the Mississippi Department of Transportation to assist agencies with grant applications. In Arizona, an official with a selected subrecipient said he learned about the JARC program changes through its metropolitan planning organization’s committee meeting.

Of the 34 total selected recipients we interviewed, 22 stated they found the guidance provided to them, either from FTA directly or through their respective designated recipients, to be sufficient and effective in communicating program changes. For example, an official from a designated recipient in Mississippi who characterized FTA’s communications as effective noted that the information was readily available, but that it was primarily up to recipients to read the guidance and follow up with FTA on any questions or concerns. An official from a selected subrecipient in Virginia said that the state’s communication regarding the MAP-21 program changes was good and that FTA’s written resources also provided useful details on the changes.

Selected Recipients Continue to Provide JARC Activities, but the Full Impact of Statutory Changes Is Unclear

Almost all (30 of 34) selected recipients reported that they have continued providing JARC activities, such as transportation services, that were started prior to the 2012 MAP-21 consolidation. About two-thirds (22) of the selected recipients we interviewed have maintained all such activities. Officials from half of the selected recipients (17) reported that they still are expending dedicated JARC program funds received prior to the 2012 statutory changes to support their ongoing JARC activities, and that they plan to continue using those funds until they are depleted. Further, all selected recipients reported that they have had to address, or anticipate having to address, service or funding challenges in order to continue their JARC activities. Despite reported challenges, all selected recipients except one reported they are working to maintain their JARC activities, including service hour expansions and commuter bus routes. Some selected recipients reported that it is too soon to tell whether they will need to make additional adjustments to their JARC activities in the future because of possible year-to-year funding challenges.

Selected Recipients Stated That to Date, They Have Continued Funding and Providing JARC Activities

Of the 34 selected recipients we interviewed, 30 had continued JARC activities, such as ongoing transit service, started prior to the MAP-21 changes. These selected recipients reported that they have maintained some level of JARC activities using a number of funding sources, including urban or rural transit program funds and remaining JARC program funds. Specifically, about two-thirds of selected recipients (22 of 34) reported continuing all of their previous JARC activities to date, and just under one-quarter (8 of 34) said they continue to provide downsized or redesigned JARC activities. The remaining 4 selected recipients had used their JARC program funds to complete short-term activities, such as capital expenditures for vehicles or pilot transit programs, which were not affected by the MAP-21 changes.

Through analysis of our interviews with selected recipients, we identified a number of reasons recipients have been able to continue JARC activities after the MAP-21 program changes. These reasons include the following:

Remaining dedicated JARC funds: Seventeen of the 34 recipients reported that they have not yet expended all of their dedicated funds and continue to use them to fund JARC activities. Officials from 5 selected recipients reported that when MAP-21 was implemented in 2012, they started planning their expenditure of remaining dedicated funds to sustain existing JARC activities into future years. For example, officials at Texas Department of Transportation, a selected designated recipient, reported redistributing dedicated funds that their subrecipients had not expended in a timely manner to other eligible subrecipients’ ongoing JARC activities. Those funds were fully expended in August 2016. Additionally, in Oregon, officials from Tri- County Metropolitan Transportation District of Oregon (TriMet), a selected designated recipient, said they distributed remaining dedicated JARC funds to subrecipients, which used this funding in combination with local funds to maintain their transit services connecting residential neighborhoods and employment centers to longer or more heavily used transit routes. The officials said they expect to close out their final dedicated program grant in June 2017.

Overall federal transit formula funding amounts were unchanged: None of the 19 selected designated recipients we interviewed reported a significant overall change to their annual FTA formula funding allocations attributable to the statutory changes. In addition, five of those designated recipients noted that the changes led to overall benefits, including reduced administrative burden and increased spending flexibility of federal funds. For example, officials from Maricopa Association of Governments, a selected designated recipient in Arizona, explained that they were able to re-evaluate ongoing service and capital needs and reallocate some unused funds (in this case, urban transit program funds that they had initially chosen to set aside for JARC activities) to undertake bus stop capital upgrades. According to the officials, the reallocation had no impact on their subrecipients’ JARC activities, and the added funding flexibility was beneficial to the region’s transit system as a whole.

JARC activities integrated into existing transit services: Half of selected recipients (17 of 34) reported that their JARC program funded activities fulfilled a variety of citizens’ transportation needs, encouraging the providers to continue those JARC activities using alternate funding sources after the 2012 statutory changes. For example, officials with Ride Connection, a selected Oregon subrecipient, stated that their ongoing JARC transit service has become an important transportation option serving the broader community with trips to schools and grocery stores, in addition to job centers. A dedicated program grant currently funds this service, but officials we spoke with said they are actively seeking alternate funds to maintain it. Additionally, officials with Blue Water Area Transit, a selected Michigan subrecipient, told us that late-night bus service initially funded under the JARC program has become popular with a wider population, helping increase ridership on their other transit services. Due to the ridership increase, officials reported that the agency is able to cover a greater portion of operating expenses using revenue from fares, providing an overall benefit to the system. Four of the recipients we selected provide transit service in university communities. Those transit officials said that students, faculty, and other campus employees make up a large portion of transit riders in their jurisdictions. This customer base creates demand for expanded transit service hours, like extended weekday hours of operation and weekend service, which JARC program grants had previously funded. These selected recipients all reported that they now receive dedicated local transit funding from the university or surrounding jurisdiction to maintain these services.

Importance of JARC activities to the community: Officials from just over one-third of selected recipients we interviewed (12 of 34) stated that transportation for low-income workers is a high priority in their communities, and they are willing to seek out additional funds in order to sustain JARC activities. For example, TriMet reported receiving political support from its regional business community for transit access to low-wage employment centers, particularly during off-peak hours such as evenings and weekends when transit service can be limited. TriMet officials explained that their transit system attracts relatively high interest from employers because their main local funding source is a payroll tax. Additionally, officials with Flint Mass Transportation Authority, a selected Michigan designated recipient, reported that limited job availability in their metropolitan area creates a high demand for JARC commuter bus routes that service employment centers in other jurisdictions. According to the officials, the funding needs of their commuter service limit the amount of funding available for other needs such as capital purchases.

Officials from the eight selected recipients said they continue to provide downsized or redesigned JARC activities, service modifications or other changes that have enabled them to maintain a level of JARC activities to help meet low-income riders’ needs. Reported adjustments fell into three categories:

Realigning service and funding: Two selected recipients reported redesigning their JARC activities. Lower Rio Grande Valley Development Council, a selected designated recipient in Texas, reported realigning one 50-mile long JARC funded route into three separate routes to more efficiently meet rider needs. These bus routes serve affordable housing projects in rural areas—locations that, according to officials, had limited transit options before the service began—and job centers in urban areas such as industrial parks and universities. Additionally, officials with Suburban Mobility Authority for Regional Transportation, a selected Michigan designated recipient, reported that one of their subrecipients, a nonprofit transit provider, adjusted service on a JARC funded demand response bus service to better align it with community needs and funding sources. The officials said the service primarily served elderly and disabled riders; after fully expending dedicated JARC funds, the officials have used funds from FTA’s Enhanced Mobility of Seniors and Persons with Disabilities program to maintain the service. However, they also said that as a result of this funding change, the service’s target ridership now focuses exclusively on seniors and persons with disabilities in order to comply with program requirements.

Adjusting service hours or frequencies: Two selected recipients informed us that they were unable to sustain all activities started with JARC program grants, but have adjusted service hours and frequencies to allow them to continue some such activities after the program changes. Officials with the Oregon Department of Transportation, a selected designated recipient, reported that a number of their subrecipients that provide transit service used dedicated JARC program grants to fund enhancements such as expanded service hours, more extensive service areas, and increased bus frequencies. After the statutory changes, some of Oregon Department of Transportation’s subrecipients had to partially cut back their transit service enhancements, but aspects of the enhancements remain. More specifically, officials said that one of their subrecipients maintained 2 of the 4 hours of enhanced bus service, but eliminated the 8 p.m. to 10 p.m. window after the JARC funds ran out. Blacksburg Transit, a selected Virginia subrecipient, reported reducing service on a JARC commuter bus route from two round trips per day to one daily round trip, which it said allowed them to fulfill a community need while reducing the cost of the service.

Discontinuing select low-ridership JARC activities: Officials with 4 selected recipients explained that they discontinued some JARC activities with limited ridership. According to these recipients, they have found ways to provide alternate services for transportation- disadvantaged individuals, including those commuting to low-wage jobs. For example, officials with Detroit Department of Transportation, a selected designated recipient in Michigan, reported discontinuing a demand response service after their dedicated JARC funding was expended. The officials explained that they used city resources to assist individuals that used the demand response service in finding more transit-accessible workplaces, and utilized federal and local funds to enhance existing fixed route bus service. Additionally, officials with Brownsville Metro, a selected subrecipient transit agency in Texas, reported that they discontinued one of their JARC bus routes when a local university that directly benefited from the service could no longer provide the required matching funds to maintain the route. However, a different JARC route funded through a partnership with a neighboring county continues operation.

Selected JARC Recipients Identified Some Ongoing Funding and Service Challenges, as well as Possible Methods for Addressing Challenges

Selected recipients reported facing service and funding challenges in continuing JARC activities after the statutory changes in 2012. FTA officials explained that low-income transit users may live or work in areas that are not adjacent to heavily-serviced transit areas, a situation that can make JARC activities more expensive to provide than other transit service. A majority of our selected recipients (25 of 34) reported service challenges due to factors such as location of housing or employment characteristics of low income individuals (e.g., working late-night hours or weekends). Additionally, officials with almost all selected recipients (33 of 34) reported facing challenges pertaining to funding. For example, many noted that they have had difficulty competing for funds against other public services. Table 1 below highlights some of the service and funding challenges our selected recipients identified, as well as examples of methods some selected recipients used to address these challenges.

It Is Too Soon to Determine the Full Impact of Statutory Changes on JARC Activities

A substantial amount of dedicated JARC funds apportioned in 2012 and earlier under SAFETEA-LU remains unspent. According to FTA data, as of February 2017, there are approximately 265 federally funded JARC program grants accounting for about $147.9 million still open with funds to expend. As noted earlier, half of our selected recipients reported that they have not yet expended all of their dedicated federal JARC funds. For those with dedicated funding still available, they may not yet have faced the decision of whether to continue to fund—or at what level to fund— eligible JARC activities under the urban or rural transit program, whether to fund other eligible activities under those programs, or whether to seek additional nonfederal funds to continue their eligible JARC activities.

Officials with nine of the selected recipients with dedicated funds remaining said they have not yet finalized plans for continuing their current JARC activities after the funds are expended and that they were not sure if the activities would be maintained as-is or be adjusted. For example, Sun Metro Mass Transit Department, a selected designated recipient in Texas, reported that it plans to re-evaluate eligibility requirements for its JARC activities and analyze its regional transit priorities before making a final future funding decision. Also, officials with RADAR Transit, a selected Virginia subrecipient, reported that they are working to educate regional government officials about the benefits of the current JARC activities in advance of dedicated funds being expended, but officials are not sure whether they will be able to obtain local funds to replace their expended monies. However, the remaining eight of the 17 selected recipients with dedicated funds remaining have developed plans to continue their JARC activities after spending all of the funds.

Officials from 7 of the 17 selected recipients that have already expended all of their dedicated funds stated that they are uncertain whether they will be able to obtain long-term funding to continue to support JARC activities into future years. For example, a selected subrecipient transit agency in Michigan reported that to date the state has provided funding in the annual budget to sustain its JARC activities. However, that funding is not guaranteed to continue beyond year to year. Officials with a selected Mississippi subrecipient nonprofit transportation provider explained that the funding amounts they receive from local jurisdictions for their rural JARC transit service can be inconsistent, making it challenging for them to cover the local portion of their operating expenditures. Also, officials with Charlottesville Area Transit, a selected Virginia subrecipient, explained that the level of local and state funding, which they currently use to help sustain expanded transit service hours started with a JARC program grant, could change in the future. According to the officials, at any time their jurisdiction could redirect municipal funds to non-transit activities such as the city’s fire or police departments. Furthermore, these officials reported that Virginia’s state gas tax, which provides transit operating funds, is scheduled to sunset in 2019 and might not be renewed. However, all seven selected recipients that have expended their dedicated funds and face such uncertainty indicated that they are seeking sustained, long-term funding sources to help them continue JARC activities in the future.

Agency Comments

We provided a draft of this report to DOT for comment. DOT had no comments on this report.

We are sending copies of this report to the appropriate congressional committees, the Administrator of FTA, the Secretary of the Department of Transportation, and interested congressional committees. In addition, the report is available at no charge on GAO’s Web site at http://www.gao.gov.

If you or your staff have any questions about this report, please contact me at 202-512-2834 or GoldsteinM@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs may be found at the last page of this report. GAO staff who made key contributions to this report are listed in appendix II.

Appendix I: Selected Job Access and Reverse Commute (JARC) Designated Recipient and Subrecipient Interviews

Appendix II: GAO Contact and Staff Acknowledgements

GAO Contact

Staff Acknowledgments

In addition to the individual named above, the following individuals made important contributions to this report: Heather MacLeod (Assistant Director), Betsey Ward-Jenks (Analyst-in-Charge), Dwayne Curry, Andrew Furillo, Delwen Jones, Elizabeth Wood, Rachel Frisk, Cheryl Peterson, and Max Sawicky.