Local Matching Funds

Frequently Asked Questions

Q. We currently receive Federal Highway Administration (FHWA) and Federal Transit Administration (FTA) grants. Are there any types of Federal grant money that can be used as local match for FHWA and FTA funds?

A. The following Federal funding may be used for local share of FTA programs to the extent described below:

Federal funds that are Derived from Amounts Made Available to a Federal Department or Agency Other than DOT.
Unless Federal Transit Law specifies program funding made available to other Federal agencies as eligible for local share for FTA programs, FTA leaves the determination whether another agency’s funding may be used for local share for FTA programs to that agency. Under the laws and regulations governing that funding, however, that funding must be eligible for use in public transportation projects.
1. If another Federal agency permits its funds to be used for local share, the following FTA programs are expressly authorized by Federal Transit Law to accept that funding for local share:
  - (1) Elderly Individuals and Individuals with Disabilities Program, 49 U.S.C. § 5310.
  - (2). Nonurbanized Area Formula Program, 49 U.S.C. § 5311.
  - (3) Job Access and Reverse Commute Program, 49 U.S.C. § 5316; however, specific program information for other types of Federal funding is available at https://www.transit.dot.gov/ccam/about/.
  - (4) New Freedom Program, 49 U.S.C. § 5317, however, specific program information for other types of Federal funding is available at https://www.transit.dot.gov/ccam/about.
2. If another Federal agency permits its funds to be used for local share, the following FTA programs are implicitly authorized by law to accept that funding:
  - (1) Urbanized Area Formula Program grant, 49 U.S.C. § 5307 [because TANF funds are expressly authorized for use as local share].
  - (2) Programs for which FTA can provide 100% FTA assistance, provided that the conditions precedent for 100% FTA assistance are fulfilled, including but not limited to:
    - (a) Planning Program, 49 U.S.C. 5305(b).
    - (b) National Planning and Research Program, 49 U.S.C. 5305(e).
    - (c) National research program, 49 U.S.C. § 5312(a).
    - (d) National Transit Institute, 49 U.S.C. § 5315.
    - (e) Paul S. Sarbanes Transit in the Parks Program, 49 U.S.C. § 5320.
    - (f) Human Resources Programs, 49 U.S.C. § 5322.
Funding for the Temporary Assistance for Needy Families (TANF) Program, Section 401 et seq. of the Social Security Act, 42 U.S.C. 601 et seq. is expressly authorized by Federal Transit Law for use as local share in the following FTA programs:
1. Urbanized Area Formula Program, 49 U.S.C. § 5307.
2. Elderly Individuals and Individuals with Disabilities Program, 49 U.S.C. § 5310.
3. Nonurbanized Area Formula Program, 49 U.S.C. § 5311.
4. Job Access and Reverse Commute Program, 49 U.S.C. § 5316.
5. New Freedom Program, 49 U.S.C. § 5317.
DOT/FHWA Federal Lands Highway Program, 23 U.S.C. § 204, is expressly authorized by Federal Transit Law for use as local share in the following FTA programs:
1. Elderly Individuals and Individuals with Disabilities Program, 49 U.S.C. § 5310.
2. Nonurbanized Area Formula Program, 49 U.S.C. § 5311.
3. Paul S. Sarbanes Transit in the Parks Program.

(Answer revised September 15, 2009)

Q. Can the provision of equipment (outdoor bike racks) be considered In-kind match?

A. The law recognizes in-kind matches, but FTA policy determines what is eligible. The FTA regional office that oversees your grant would determine if the equipment you describe would be acceptable as an in-kind match.

Bicycle access, including bicycle storage facilities, are eligible transit enhancements, and thus an eligible “capital project” as defined in the Federal Transit Laws. 2 CFR Part 200.306 provides that a Recipient may provide in-kind contributions toward the local share provided the Recipient formally documents the value of each non-cash share, and if this value represents a cost that would otherwise be eligible under the Project. The net project cost of the Project for which the donated property is credited must include the value of any in-kind contributions in the net project cost of that Project to the extent it is used as local match. (Revised: May 2017)

Q. Can you provide a link or identify where to find the requirements related to in-kind match for the urbanized program (Section 5307)?

A. FTA Grant Management Circular 5010.1D covers the issue of "local match" funds in Chapter VI, paragraph 3. If you would propose to use "in-kind" resources rather than funds for your local match, you should contact your regional FTA office to discuss the nature of the in-kind contribution. (Posted: February, 2011)

Q. Does the FTA allow the use of in kind contributions (labor) from a third party under a small Urbanized 5307 Planning grant as local match? The total grant amount is $100K background: This project is a multi operator transit center study; one of the operators wishes to contribute via in kind labor dollars.

A. You need to submit your proposal for local match funds to your FTA Regional Office. Visit the web page for the FTA Region 9 Office in San Francisco.

You may reach them by phone at: 415-744-3133. (Posted: February, 2011)

Q. When an Individual Transit Authority applies for FTA Grant under MAP-21, assuming the Grant is 80%, does the Individual Transit Authority have to define at time of grant application where the other 20% is coming from (i.e. general funds, etc.)?

A. Yes, per FTA's Circular 5010.1D, the grantee must certify that it has or will have available the proportionate amount of local share promptly as project costs are incurred or become due, except to the extent that the Federal Government determines in writing that the local share may be deferred. The grantee may not use an amount as match for more than one grant. (Posted: November, 2015)

Q. If the Transit Authority must define the source of its share of the grant funding, can the Individual Transit Authority finance the 20% from a Financial Institution?

A. FTA's Master Agreement lists permissible sources of local share as (1) Undistributed cash surpluses, (2) A replacement or depreciation cash fund or reserve, or (3) new capital. New capital would include a loan from any of various financial sources. (Posted: November, 2015)

Q. Is the grant given from the FTA always up front (i.e. 80% in acquisition year) or is it sometimes distributed over a period of years (i.e. 10% over 8 years)? And if so, may the Individual Transit Authority use the annual distribution to make payments on financing?

A. When FTA awards a grant, that amount is available at time of award. For example, if a grantee applied for a grant from FTA for $1,000,000.00, then the $800,000.00 (80%) would be available at the time the grant award is executed. The grantee would then be able to draw down on those funds as project costs are incurred. With respect to transit authorities using grant funds to make payments on financing, which is allowed. According to FTA Circular 9030.1E Chapter IV, pages 21-22, there are several areas in which interest is an eligible project cost for FTA's Section 5307 and 5339 program assistance, with certain limitations. They are:

1. Bond interest in advanced project authority
2. Buildings and equipment
3. Working capital
4. Leasing
5. Capital cost of contracting
6. Other interest: FTA will consider other interest costs on a case by case basis.

Further, OMB's Super circular 2 CFR Part 200 states "financing costs (including interest) to acquire, construct or replace capital assets are allowable, subject to the conditions set forth in §200.449 of the Super Circular.(Posted: November, 2015)

Last updated: Thursday, December 21, 2017

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