Program Management Insights for the Section 5310 Program, Including Subrecipient Consolidation and Urban 5310 (2022)

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2 monitoring standards have also impacted the current program man- agement practices. The responsibilities of managing the Section 5310 program go beyond SGR and coordination and also include monitoring for reg- ulatory compliance and measuring performance. For example, the Division of Public Transit at the West Virginia Department of Trans- portation (WVDOT) traditionally monitored the use (i.e., mileage and ridership) of subrecipient Section 5310 vehicles to ensure the vehicle was being actively operated and not just sitting in the parking lot. If reports indicated poor performance, the subrecipient would be at risk of losing its vehicle, which could be reallocated to another Section 5310 program subrecipient or applicant that had a need for it. Proactive management responsibilities for multiple subrecipients take time and effort and are increasingly demanding at a time when state DOT and urban transit management staffs are smaller, transi- tioning, and/or shrinking in size. This juxtaposition is forcing program managers to examine and restructure their management practices and approaches. The research results identify current program management prac- tices used by Section 5310 recipients, including state DOTs, metro- politan planning organizations (MPOs), and urban transit agencies, to effectively manage multiple Section 5310 subrecipients. The Task 79 research was conducted with the intent of producing results that help Section  5310 recipients identify new Section  5310 program management approaches that could be implemented in their own areas to make overseeing and providing assistance to multiple sub- recipients not only more effective but also less demanding. Research findings will also inform transit industry leaders such as APTA and CTAA on how best to influence the future of Section 5310 programs under the current authorization as well as those yet to come. The research reveals a variety of program management strate- gies and philosophies. Because of the flexibility in the Section 5310 program, designated recipients have developed unique approaches that help them apply the funding through a strategic approach that works to address local and regional transportation needs for older adults and individuals with disabilities. Overall, the common theme is that program managers believe in the importance of the program but find the amount of funding available through Section 5310 does not move the needle far enough toward addressing the demand for services. Key findings of the research include the following: • The flexible nature of the regulation with respect to project selec- tion and the ability to use both capital and operating funding makes this small pot of FTA funding a useful tool. At the same time, the level of need for transportation, particularly for services that enhance mobility for older adults and individuals with dis- abilities, is so great that the program cannot meet demand, and applications routinely surpass the available funding. • When the Section 5310 program managers must make difficult decisions, tools such as prioritizing and scoring, coordination, and regionalization can make a difference. Tools for recordkeep- ing and technical assistance are especially valuable in managing many awards over multiple years. • The Section 5310 program is small in comparison to public transit funding programs Section 5307 and Section 5311. However, Sec- tion 5310 requires the same or greater commitment of adminis- trative time as the larger programs, demanding what can appear to be an outsized amount of time for the funding awarded. • Program managers have not chosen to focus on reducing the number of subrecipients as a primary strategy for administering the program. The focus has instead been on streamlining and improving the administrative process through regional mobility managers or local coordinating councils. • Even in instances where a focus on regionalization and on pur- chase of services has resulted in fewer grant awards administered, the program managers make a point of recruiting new services to fill gaps and meet the need for specialized transportation. New services include public-private partnerships, mobility managers, and interagency agreements for transportation programs. • Program managers agree that the need for transportation ser- vices for older adults and individuals with disabilities outweighs the funding available in many areas, particularly in rural areas. CHAPTER 1 BACKGROUND 1.1 Purpose of Research Since its inception in 1974, the Enhanced Mobility of Seniors and Individuals with Disabilities Program, 49 U.S.C. 5310, has undergone several reauthorizations that have impacted the program and des- ignated recipients in various ways. A designated recipient is either the state agency responsible for administering the funds for areas under 200,000 in population or the agency identified as responsi- ble for receiving and apportioning funding to urbanized areas (UZAs) of 200,000 or more. Designated recipient responsibilities include applying for and managing the grant and overseeing subrecipients in their geographic areas. Apportionments for the Section  5310 program have increased dramatically over the years, which has enabled designated recipients to increase their number of subrecipients or to provide more funding to existing subrecipients. Significant policy changes have accompa- nied each reauthorization, such as the eligibility of public agencies as applicants and coordinated transportation initiatives. Designated recipients have had opportunities to reevaluate their approaches to program management in response to each reauthorization. As the requirements for the program have changed over time, designated recipients are finding that they manage increasingly large numbers of subrecipients and a larger pot of money to fund eligible projects. This study sought to clarify the following points: • Are designated recipients finding it in the best interest of the program to implement management strategies that result in fewer subrecipients, consolidation, or coordinated transporta- tion structures? • Have the reauthorizations led to well-structured programs that continue to function with numerous subrecipients? • Are there unique practices used by states and metropolitan planning organizations (MPOs)/councils of government (COGs)/ urban transit agencies that could be replicated in other areas to effectively and meaningfully manage the Section 5310 program so it meets the transportation needs of the targeted population groups? Research results will help Section  5310 recipients—states and MPOs/COGs/urban transit agencies—identify demographically sim- ilar areas, and will facilitate learning and applying new Section 5310 program management approaches to make overseeing multiple

3 subrecipients more effective and potentially less demanding. The research will also inform transit industry leaders such as APTA and the CTAA on how best to influence the future of Section 5310 pro- grams under the current and future authorizations. Documenting and studying how Section 5310 funds are used by various states and urban areas will provide meaningful information for budgetary decision-makers. This report describes current state and UZA practices and innovative management models. Ultimately, the study documents how Section 5310 funds are being programmed and provides information on the tools, strategies, and opportunities that have demonstrated success in local areas. 1.2 Research Scope of Work The research process included the following tasks: • Do a literature review and document common program manage- ment practices • Write interview and survey questions for state DOTs and large urban-area Section 5310 programs • Survey and interview state DOT Section 5310 program managers and urban area recipients • Synthesize interview and survey findings • Conduct case studies • Write draft and final reports 1.3 History of the Program The FTA website (www.transit.dot.gov/funding/grants/enhanced- mobility-seniors-individuals-disabilities-section-5310) provides the Sec tion 5310 grant program overview: This program (49 U.S.C. 5310) provides formula funding to states for the purpose of assisting private nonprofit groups in meeting the transportation needs of older adults and people with dis- abilities when the transportation service provided is unavailable, insufficient, or inappropriate to meeting these needs. Funds are apportioned based on each state’s share of the population for these two groups. Formula funds are apportioned to direct recipients; for rural and small urban areas, this is the state Department of Transportation, while in large urban areas, a designated recipient is chosen by the governor. Direct recipients have flexibility in how they select subrecipient projects for funding, but their decision process must be clearly noted in a state/program management plan. The selection process may be formula-based, competitive, or discretionary, and subrecipients can include states or local government authorities, private nonprofit organizations, and/or operators of public transportation. Originally created in 1973 as Section 16(b)(2) of the Urban Mass Transportation Act, the program became Section 5310 with the codifi- cation of federal transit laws in 1994. Created as a discretionary capital program because the focus was to serve older adults and individuals with disabilities where existing service did not meet need, the program was used by nonprofit agencies, often with a very limited budget. These agencies provided transportation to support their primary services. The Section 5310 funding allowed them to purchase vehicles larger and more specialized (often through state contracts) than what they could get on their own. This in turn allowed them to serve more passengers, or serve their existing passengers with better equip- ment. Many states used the Section 5310 program as a supplement to rural public transportation systems or to enhance human services agency or nonprofit transportation programs operating in areas with- out public transit. Figure 1 shows a timeline of relevant legislation and illustrates how the categories of eligible projects have evolved. The SAFETEA-LU authorization in 2005 included a requirement for locally developed coordinated public transit-human services transpor- tation plans (known as coordinated plans), and formation of a coordi- nation committee including older adults and people with disabilities to update the plans periodically. Coordination efforts had been a best practice up to that point, but not mandated. The landscape quickly changed as new legislation required Section 5310 projects be “derived from” (SAFETEA-LU, MAP-21) and later “included in” (FAST Act) a coordinated plan. Public transit providers receiving Sec- tion 5311 funds were originally required to participate in the coordi- nated plan, but that requirement was later removed. States typically oversee plan development in rural areas. Organizations representing UZAs were tapped to participate in or lead local coordinated plans in some states, and often went on to prioritize projects locally before sending the projects to the state. Coordination in the context of human services transportation has often been a euphemism for consolidation, which is not always viewed positively. While the benefits of consolidation are typically seen as reducing duplication in transportation program administra- tion and simplifying the ride-finding process from the user’s perspec- tive, consolidation can be seen as a political hot button poised to reduce or eliminate an agency’s staff and services. For this reason, coordination efforts may lean toward generating collaboration and information-sharing, or purchase of services and ride-sharing. Some states and UZAs have chosen coordination in the form of regionalism. Regions may or may not consolidate service, but allow some administration duties to pass through from the state to one or a limited number of local actors, easing the state’s burden. In the case of a regional agency, regionalism can indicate the regional agency is reaching out and coordinating with multiple providers to smoothly cover a larger geographic area, or it can indicate an impetus from the local level to reach up and get help serving clients’ needs across a greater area. Prior to the MAP-21 authorization in 2012, all Section 5310 funds were allocated to the states for distribution. Some states suballo- cated a portion to large UZAs and some held competitive selection of projects across urban and rural areas. With MAP-21, Section 5310 funds were shared between large UZAs (which received 60% of pro- gram dollars), small UZAs (receiving 20% of funds) and rural areas (the remaining 20%). This authorization did not increase available program dollars, which led the small UZAs and rural areas to feel the program had been cut or significantly reduced in rural areas, where transportation services were typically not sufficient to meet demand. In subsequent allocations additional funding was set aside, and the program has grown, so there is significantly more money going to each state now than when the program was split. Still, the concern that rural areas are shortchanged persists in some states. The Section 5310 funding that goes to UZAs may go to city/ county governments, MPOs, COGs, or transit agencies as FTA “des- ignated recipients” (agencies designated by the state governor or their designee to receive and/or suballocate funds) or “direct recip- ients” (agencies receiving funding directly from the FTA). This report uses “UZA recipient” to indicate the collection of regional-level

4 Enhanced Mobility of Seniors and Individuals with Disabilities Program established Codification of federal transit laws CARES Act (2020) Federal-Aid Highway Act of 1973 (Section 16(B)(2)) Funds for vehicles are apportioned among the states for distribution to local non-profit agencies.Where public transit was unavailable, insufficient, or inappropriate, the discretionary capital assistance program awarded grants to private nonprofit organizations to serve the transportation needs of seniors and persons with disabilities. Surface Transportation Assistance Act of 1982 Continued program. Surface Transportation & Uniform Relocation Assistance Act (1987) Continued program. Intermodal Surface Transportation Efficiency Act of 1991 (ISTEA) Formalized formula funds, raised funding to $50-60M annually; introduced eligibility of public transit agencies to facilitate and encourage coordination of human service transportation; in lieu of purchasing vehicles, purchase of service (prioritizing for- and non-profits over transit) was added as an eligible expense; ability to transfer flexible funds from Section 16 to rural and urban formula programs. “Section 16(B)(2)” becomes 49 U.S.C. Section 5310. Transportation Equity Act for the 21st Century (TEA-21) (1998) Reauthorized the Section 5310 program with increased funding levels; States could accumulate a percentage portion of funds for 80% federal share of administrative use. Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users SAFETEA–LU (2005) Introduced the requirement that Section 5310 projects be derived from a locally developed, coordinated public transit-human services transportation plan; introduced a pilot program that allowed seven states to use up to one-third for operating assistance; allowed transfers to Section 5307 or 5311 only for projects selected for Section 5310 program purposes; permitted states to use 10% for administrative costs at 100% Federal share. Moving Ahead for Progress in the 21st Century Act (MAP-21) (2012) Repealed the New Freedom (Section 5317) program and merged eligible activities into Section 5310 including public transportation projects that improve access to fixed-route service and decrease reliance by individuals with disabilities on complementary paratransit, Mobility Management uses, and limited operating funds (at 50% match); required a minimum of 55% of funds awarded to capital ‘traditional uses’; apportioned 60% of funds to new ‘designated recipients’ in large urbanized areas, 20% to small urbanized areas and 20% to rural areas (instead of all funding to states). Fixing America's Surface Transportation (FAST) Act (2015) Required that projects be ‘included in’ a coordinated plan; encouraged participation in coordinated service delivery as long as the purpose of the program is met; made State or local governmental entity that operates a public transportation service and that receives direct grants under 5311 or 5307 an eligible direct recipient for Section 5310 funds; created a pilot program for innovative coordinated access and mobility for the transportation disadvantaged population; clarified that match could come from other Federal (non-DOT) funds; clarified addiction was an eligible disability allowing transportation to treatment. Provides emergency assistance and health care response for individuals, families and businesses affected by the COVID-19 pandemic and provide emergency appropriations to support Executive Branch agency operations during the COVID-19 pandemic. FTA allocated $25 billion to recipients of urbanized area and rural area formula funds (Section 5307 and 5311). Section 5310 programs received no additional funds, but some agencies flexed the public transit funding, and some converted transit vehicles to meal and prescription delivery. Additional defined uses, Clarification of non-DOT match, Projects in Coordinated Plan New Freedom Uses: Beyond ADA, Operating, Mobility Management; Split funding between UZA/Rural Vehicles, Non-Profits Purchase Service, Transit & For-Profits, Flex funding Coordinated Plan, Capital equipment, Preventative maintenance eligible spending Funds for Administration a timeline of transportation funding FIGURE 1 Timeline of Section 5310 legislation and uses.

5 program managers. Where recipients are typically the first level of program manager working directly under the FTA, subrecipients are generally receiving the funds to use in their local community. At the time of MAP-21, some UZA recipients decided to leave Section 5310 program administration in the hands of the state, so several states continued to manage both the UZA and state grants. In other areas, the UZA recipients found it was to their advantage to administer the “new” funds according to local priorities rather than assigning them back to the state. The range of allowable purposes for Section 5310 funds has also changed over time. Originally, the eligible projects were limited to purchasing vehicles for agencies that served the target popula- tion; operating expenses were not eligible. With MAP-21, operating expenses were permitted in a limited capacity, preventive mainte- nance was considered a capital cost, and mobility management was added as either a capital or operating cost, depending on the activ- ities of the mobility manager. Several of these uses were a part of the standalone New Freedom program (Section  5317) introduced in 2005 that provided funding to assist transit agencies with projects that went beyond ADA requirements. The New Freedom program was later merged with Section  5310 as part of MAP-21, allowing the funding to be used for infrastructure improvements (sidewalks, bus pads, lighting, signalization) and other projects that extended access to fixed-route transit or went beyond ADA requirements. With the expansion of eligible uses for the Section  5310 program, the funds had to stretch further, and additional applicants became grant subrecipients. Some states and other designated recipients placed additional eligibility restrictions on the funds, the most common being awarding funds to capital projects only, as a way to control the growth of the program and manage administrative capacity. 1.4 Funding Context Section 5310 provides funding for large and small UZAs and rural areas, as defined in Table 1, which presents the apportionment of federal funds assigned to the Section 5310 program, with the distri- bution based largely on census data for each category. The FY 2021 apportionment is likely the last year that 2010 census data would be used; future years will use population data from the 2020 census. Transportation bills—MAP-21 and the FAST Act—have designated 60% of the funding to large UZAs. The remaining funding is split between small UZAs and rural areas. There is no distinction for tribal areas, which are included in rural or small UZA totals based on population. The FY 2021 funding for large urban areas was distributed across 180 metropolitan regions, with an average of $976,405 per region. There is a dramatic range in funding, from $54,304 going to the Lake Tahoe CA-NV region to $15,913,989 going to New York-Newark, NY-NJ-CT. Small urban funding had an average distribution of $1,148,712 to each state, ranging from $85,180 distributed to Alaska up to $5,756,908 allocated to California. Rural funding is distributed to the states and several territories, each receiving an average of $1,084,895. The allocation ranges from $9,520 for the Northern Mariana Islands to $56,257 for Rhode Island, the smallest state allo- cation, and up to $3,928,438 for Texas. Figure 2 shows the total FTA transit funds awarded by grant pro- gram: the Urbanized Area Formula Program awards the most funds (32% of all awards); Section 5310 has the smallest portion at 2%. TABLE 1 Section 5310 Fund Apportionment FY 2021 APPORTIONMENT UZA/STATE DOLLARS PERCENTAGE UZAs population 200,000 or more (large urban areas) $175,752,949 60% UZAs population 50,000–199,999 (small urban areas) $58,584,316 20% Rural areas population under 50,000 $58,584,316 20% National total $292,921,581 100% Source: FTA website, www.transit.dot.gov/funding/grants/summary- grants-data-and-transit-trends. 5% 14% 2% 19% 5% 14% 32% 9% Bus and Bus Facilities Program Capital Investment Grant Program - Subtotal Enhanced Mobility of Seniors & Individuals with Disabilities Program - Subtotal Multisource Grants - Subtotal Rural Program - Subtotal State of Good Repair Program - Subtotal UZA Formula Program - Subtotal Other Specialized Programs FIGURE 2 Total funds awarded by program.