Section 5311 Formula Grants for Rural Areas

The Federal Transit Administration Section 5311 Federal Formula Grant Program is administered at the state level by the Oregon Department of Transportation to support public transportation systems serving rural communities. This program is part of a broader federal initiative to ensure mobility access for populations living outside urbanized areas, particularly where transit services are limited or nonexistent. Funds are apportioned by the Federal Transit Administration to states using a formula, and the Oregon Department of Transportation distributes these funds to eligible local subrecipients based on ridership, service miles, and base allocations. The 2027–2029 funding cycle reflects a continuation of this formula-based distribution approach rather than a competitive discretionary grant model. The primary purpose of the program is to maintain, enhance, and expand public transportation services in rural areas with populations under 50,000. The program supports a wide range of activities that improve access to essential services such as healthcare, employment, education, and public services. Funding is intended to promote efficient coordination among transportation providers and to strengthen mobility management practices. The program also aligns with federal goals to improve accessibility and ensure equitable transportation opportunities for underserved populations in rural regions. Funding under this program can be used across several categories, including capital projects, operating expenses, project administration, preventive maintenance, and mobility management. Eligible capital expenses include the acquisition of vehicles such as buses and vans, construction or improvement of facilities, purchase of equipment, and technology investments. Operating expenses may include driver salaries, fuel, maintenance, insurance, and other direct system costs. Preventive maintenance and mobility management activities are also eligible and are treated as capital expenses under federal guidelines. However, all costs must comply with federal cost principles, including being necessary, reasonable, allocable, allowable, and properly documented. The program requires cost sharing, with match requirements varying by project type. For capital, administrative, preventive maintenance, and mobility management projects, federal funds cover approximately 89.73 percent, requiring a 10.27 percent local match. For operations, federal funding covers 56.08 percent, with a significantly higher local match requirement of 43.92 percent. Local match funds must be from eligible sources and available at the time of award, and subrecipients must demonstrate and document their use throughout the project lifecycle. Eligibility is limited to prequalified subrecipients that operate transit services in rural communities within Oregon. These include public agencies, nonprofit organizations, and tribal governments that provide public transportation services to the general public. Applicants must submit both an initial and a final application as part of a two-phase review process. Initial applications are screened for completeness and eligibility, and applicants receive feedback before submitting a revised final application. This structure is intended to improve application quality and streamline the review process. The application timeline for the 2027–2029 cycle includes multiple milestones. Guidance was published in early March 2026, with the application portal opening shortly thereafter. Initial applications are due in mid-May 2026, followed by a revision period and final application submission in mid-July 2026. Training sessions and question-and-answer webinars are scheduled throughout the process to support applicants. Award notifications are communicated via email, and grant agreements are expected to be executed between early and late 2027, with the performance period beginning October 1, 2027. The grant performance period varies by project type, with operating and maintenance projects lasting two years and capital projects extending up to four years. Subrecipients must comply with extensive reporting, monitoring, and federal regulatory requirements, including environmental reviews, asset management, and financial reporting. The program represents a critical and ongoing funding source for rural transit providers, supporting both operational sustainability and long-term infrastructure development.

Ensure budgets follow federal cost principles and include complete indirect cost documentation; use initial application feedback to strengthen final submission; align projects clearly with eligible categories