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November 2011
NATIONAL COOPERATIVE HIGHWAY RESEARCH PROGRAM
Responsible Senior Program Officer: Gwen Chisholm-Smith
Research Results Digest 356
ANALYSIS OF STATE RURAL INTERCITY BUS STRATEGIES:
REQUIREMENTS FOR UTILIZATION OF S.5311(F) FUNDING
This digest presents the results of NCHRP Project 20-65, Task 20, "Analysis
of Rural Intercity Bus Strategy," and Task 25, "Evaluate Requirements for
the Utilization of Section 5311(f) Funds for Intercity Bus Service." The
research was conducted by KFH Group, Inc., Bethesda, Maryland, under
subcontract to Cambridge Systematics, Inc., Cambridge, Massachusetts.
Frederic D. Fravel, KFH Group, Inc., was the Principal Investigator. The
other author of this report was Reyes Barboza, Jr., of KFH Group, Inc.
CHAPTER 1 PROJECT BACKGROUND Safe, Accountable, Flexible, Efficient Trans-
portation Equity Act: A Legacy for Users
INTRODUCTION (SAFETEA-LU) added a requirement that a
This report documents the research and state seeking to certify must conduct a
findings conducted under two NCHRP 20- consultation process involving the inter-
65 task order projects: Task 20--Analysis city bus operators and other stakeholders
of Rural Intercity Bus Strategy, and Task to determine unmet need.
25--Evaluate Requirements for the Utiliza- States have a great deal of flexibility
tion of Section 5311(f) Funds for Intercity in how they administer their Section
Bus Service. Both projects focus on state- 5311(f) programs, as long as they satisfy
level implementation of the Federal Transit certain federal requirements. Recent addi-
C O N T E N T S Administration's (FTA) Section 5311(f) tions to the FTA oversight of state program
Chapter 1--Project funding program. The objectives of the management have focused new attention on
Background, 1 Task 25 research complemented and ex- state Section 5311(f) program implementa-
Chapter 2--Section 5311(f) panded the work that was under way for tion, including the consultation/certification
Program Description, 5
Task 20, and thus the research results have process for states certifying no unmet needs
Chapter 3--Methodology, 10 been combined into a single report. The for the program. The research documented
Chapter 4--Existing Conditions: outcomes of these two NCHRP task proj- in this report found that, while an increasing
Intercity Services Identified by
States, 13 ects provide a snapshot of the current sta- number of states are implementing Section
Chapter 5--Status of the National
tus of the program across the nation, and 5311(f) programs, the success of a program
Network, 22 also provide states with examples and in meeting federal requirements and in
Chapter 6--State Program recommendations for successful program terms of the state's own perception of their
Implementation Status, 28
implementation. program is influenced by a state's program
Chapter 7--State Program Section 5311(f) funds intercity bus ser- goals, their approach to soliciting and eval-
Approaches, 34
vice in rural areas, and is a component of the uating funding applications, staffing con-
Chapter 8--Program
Evaluation, 54
Section 5311 Rural and Small Urban Areas siderations, the availability of state funding,
Program. A full 15% of a state's Section how local match is approached, meaningful
Chapter 9--Examples of
"Successful" State Programs, 61 5311 program allocation is set aside for rural consultation with private carriers, needs
Chapter 10--Conclusions and intercity service, unless the state certifies assessment efforts, and the other factors
Future Considerations, 87 that there is no unmet rural intercity need. which contribute to a "model" program.
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The report is organized into the following · Chapter 8--Program Evaluation: documents
sections: state perceptions of successful aspects of the
Section 5311(f) program, areas for program
· Chapter 1--Project Background: provides
improvement, implementation issues, operat-
background on the development of the Section
ing program outcomes, how service gaps are
5311(f) program and the questions that gener- filled, and ridership reports.
ated this research, and summarizes the scope · Chapter 9--Examples of "Successful" State
of work for the two NCHRP task projects. Programs: describes the Section 5311(f) pro-
· Chapter 2--Section 5311(f) Program Descrip- grams of selected states that were identified as
tion: describes the Section 5311(f) program, having successful programs.
including eligible expenses and services, · Chapter 10--Conclusions and Future Consid-
matching requirements, an in-kind approach erations: identifies desirable characteristics for
to meeting local match requirements to pro- a model Section 5311(f) program and trends
vide recent funding history, and certification in state program development, summarizes
requirements for states to be excused from the survey responses related to state outlet on the
requirement to spend 15% of their overall Sec- 15% set-aside requirement, and identifies con-
tion 5311 funding on Section 5311(f) projects. siderations for the program's future.
· Chapter 3--Methodology: describes the sur-
veys, interviews, and secondary research con-
ducted to identify how states are implementing BACKGROUND
Section 5311(f). The national intercity bus network has been con-
· Chapter 4--Existing Conditions: Intercity tracting in coverage for many years, but a substan-
Services Identified by States: documents the tial shift away from services in rural areas began
findings related to funding recipients/operators with the passage of the Bus Regulatory Reform Act
and services and facilities that are being (BRRA) in 1982. Following the loss of substantial
funded by Section 5311(f) across the nation. amounts of rural intercity bus service subsequent to
An overview is also provided of national-level regulatory reform, there were a number of proposals
events leading up to and influencing current and policy studies addressing rural intercity bus ser-
conditions. vice, and a number of states began their own state
· Chapter 5--Status of the National Network: funded intercity bus programs.
describes the current state of the intercity Subsequently, the Intermodal Surface Transporta-
industry and services across the United States tion Efficiency Act (ISTEA), passed by Congress
as a whole, including Greyhound Lines, re- in 1991, created the Section 18(i) program of as-
gional private carriers, and long-distance air- sistance for rural intercity services, offering oper-
port providers. ating, capital, and administrative funding to the
· Chapter 6--State Program Implementation states for use in maintaining or developing rural in-
Status: documents the findings related to which tercity services. This program was codified as Sec-
states administer the Section 5311(f) program tion 5311(f) in the next transportation reauthoriza-
and which states certify that there is no rural tion bill, the Transportation Equity Act for the 21st
intercity transit need. Century (TEA-21). The program has continued in
· Chapter 7--State Program Approaches: de- subsequent reauthorization bills, including the most
scribes how Section 5311(f) programs are recent, SAFETEA-LU.
implemented in those states with active pro- The Section 5311(f) program has always been
grams, including staffing, program goals, provided as a requirement that the states spend 15%
project solicitation, evaluation and selection, of their overall Section 5311 funding allocation on
funding eligibility requirements, types of proj- rural intercity projects unless the governor or de-
ects funded, federal requirements passed on signee certified that there were no unmet rural inter-
to subrecipients, supplemental state funding, city transportation needs. Funds not spent on intercity
utilization of in-kind match, consultation with projects could then be used for other Section 5311
private intercity carriers, and needs assess- projects. A partial certification is permitted for states
ment approaches. that seek to spend less than the full set-aside. Prior
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to SAFETEA-LU each year approximately one-half tinue to seek direct Section 5311(f) funding, but the
of the states certified and shifted the funds to their Sec- industry generally supports this approach of part-
tion 5311 programs. SAFETEA-LU included statu- nering with the rural transit providers. The National
tory requirements that FTA require that states engage Bus Traffic Association (NBTA), the national inter-
in a consultation process with intercity bus carriers line ticket clearinghouse, developed new procedures
prior to any such certification, and this requirement to provide for low-cost participation in interline tick-
has been included in the revised FTA Section 5311 eting by rural transit providers, and Greyhound has
Circular C 9040.1F. Several requirements now direct developed a manual and procedures to facilitate the
the states to identify the intercity carriers serving the development of interline ticket and service agree-
state, consult with them about unmet needs, and ments with the transit providers.
potentially document the needs (or lack of them) From the rural transit provider point of view, a
through studies or other actions--prior to certifying major issue continued to be the need for local oper-
that there are no unmet needs. ating match for the intercity connections. However,
As noted, there are a number of states that have FTA has allowed an innovative funding approach
consistently certified that there are no unmet rural in- that counts the value of the capital used by the un-
tercity needs, and then utilized the set-aside for other subsidized private intercity carrier as an in-kind
rural transit purposes. The consultation requirements match (at 50% of the total fully allocated cost of the
of SAFETEA-LU potentially make it much more service), thus allowing for feeder services with no
difficult to follow this strategy, and for those states local cash contribution. The cooperating private car-
that do seek to spend their entire Section 5311 allo- rier is required to document their willingness to sup-
cation on local rural public transit, a question is ply the in-kind match for the local feeder service,
whether or not reauthorization could address this and in general the carriers seek to make sure that the
issue by eliminating the set-aside, and allowing the connection is meaningful in terms of schedule and
states that wish to fund intercity projects to do so in shared stops, so that feed traffic could actually uti-
the absence of the set-aside. Related to consideration lize the connecting service to make intercity trips.
of such a change are questions about the types of Another issue is that this procedure utilizes the Sec-
grantees receiving the funds (Are they going to private tion 5311(f) funding at twice the rate of the conven-
intercity carriers or rural public transit providers?), tional match method, due to the lack of local cash
how the funds are used, the requirements imposed match--so from a state perspective it could poten-
on grantees, and the desire of the states not certify- tially fund fewer projects.
ing to continue their programs in the absence of the As states engage in additional consultation with
set-aside. the intercity bus providers (and their own transit
Over the years the traditional private for-profit operators), they also must consider that the FTA
intercity bus carriers have responded to the availabil- regulations cite as a primary goal of the program the
ity of this program in different ways. For a number provision of meaningful connections to the national
of years carriers applied for Section 5311(f) funding network of intercity bus services, specifically focus-
assistance for operations or capital, and a number of ing on the need for Section 5311(f) funded services
rural routes operated by private carriers were funded. to connect at the same stops and with schedules that
However, the requirement for local operating match allow connections to be made. FTA is also quite spe-
meant that on a fully-allocated cost basis, any carrier cific in forbidding the use of Section 5311(f) fund-
providing the local match would always be losing ing for commuter services.
money on such routes, and following the drop in rev- States involved in studies or other policy efforts
enues after September 11, 2001, Greyhound manage- are faced with issues in program design that arise
ment in particular withdrew from such contracts. At from difficulties faced by local rural transit providers
the same time it restructured its services, it dropped in developing projects that are successful, have local
service to hundreds of smaller communities across support, and at the same time meet the goals of the
the country. The corporate policy regarding Section Section 5311(f) program. At the local level, rural
5311(f) changed to favor provision of the subsidies transit needs for longer distance services often in-
to rural transit systems to provide integrated feeder clude a number of trip purposes, including medical
services that would connect with the remaining main- trips, employment, personal business, social services
line services. Other private intercity carriers con- and shopping--in addition to making connections to
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intercity bus services. Often the schedules that best mine the relationship between the demographic,
serve these other trip purposes provide for poor geographic, and funding context of those programs,
connections to intercity services, because the opti- the current state of the non-subsidized intercity bus
mal morning-in evening-out schedule for regional services, and the program policies and implementa-
needs may not mesh with long-distance services tions associated with these successful outcomes.
that are infrequent and scheduled for connections This project was conducted in two phases.
in distant places. · First, in order to identify successful strategies,
States attempting to focus Section 5311(f) funds
a survey of the state intercity bus programs was
on the intercity connection may find that rural transit
conducted to collect data on the context, the
operators do not see the need for intercity connections
programs, and the outcomes of each state inter-
as a high priority, because they may perceive more
city bus program. The survey responses were
demand for other trip purposes. The issue is then how
compiled to provide a detailed picture of exist-
to address these contradictions in a policy sense. Are
ing conditions regarding state Section 5311(f)
the riders making intercity connections the same
demographically as the rural transit riders? What programs at the time of the survey, including
are the relative sizes of these markets? What is the state program approaches, local match sources,
frequency of the different trip types? What is the and program outcomes, including routes funded
typical trip length? Should Section 5311(f) services and ridership. This survey was supplemented
be designed to serve long-distance passengers, or with information gathered through telephone
regional ones, or both? It is important to address these interviews in Task 25, as well as through sec-
issues in the development of state Section 5311(f) ondary information sources, as described in
policy as it affects local project designs. Chapter 3 of the report.
The two research projects documented in this · In the second phase, the survey results were
report sought to determine the following: analyzed and "successful" approaches for the
different contexts were identified and described
· How changes in the intercity network have to provide state program managers and policy-
affected mobility in the different states; makers with guidance to help them in develop-
· How states are addressing the issues in utiliz- ing appropriate and successful programs.
ing Section 5311(f) to address these markets;
· Whether or not information is available on the
potential market for these services (for exam- Task 25--Evaluate Requirements
ple, statewide needs assessments); for the Utilization of Section 5311(f)
· What is the best investment strategy for states Funds for Intercity Bus Service
to follow with funding intended to address rural The objective of Task 25 was to document the
intercity mobility needs; policies and procedures currently used by the states
· What types of grantees are receiving the funds for the Section 5311(f) program of assistance for rural
(are they going to private intercity carriers or intercity bus service. Through this inventory and
rural public transit providers?); process, an additional objective was to identify and
· How are the funds used; describe best practices in administering this program.
· What are the requirements imposed on These objectives complemented and expanded upon
grantees; and the work conducted under Task 20.
· What is the desire of the states not certifying In order to document the policies and procedures
to continue their programs in the absence of used by the states, and to identify administrative best
the set-aside. practices, the survey effort of the Task 20 project was
expanded to ask additional questions and receive input
RESEARCH SCOPE regarding the usage of Section 5311(f) funding, crite-
ria for determining the eligibility of grantees, program
Task 20--Analysis of Rural Intercity
requirements, and state willingness to fund such pro-
Bus Strategy
jects and grantees absent the 15% set-aside require-
The objective of the Task 20 project was to iden- ment of the Section 5311(f) program. This information
tify the most successful rural intercity bus program was compiled in a large matrix (expanding upon, and
strategies that have been implemented, and to deter- in some cases filling in the gaps of, the matrix created
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