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FLEXIBLE FUNDING FOR TRANSIT AND TRANSIT ACCESSVIEW MORE TOPICS

Three images are displayed. The image on the left shows a bus driving next to a curb. The image in the middle shows two bicyclists wearing helmets riding along a bike path. The image on the right shows a pedestrian crossing a street at a crosswalk.
(Source: Adobe Stock)

Successful transit systems rely on safe and accessible pedestrian and bicycle networks connecting riders to and from their destinations.

The Federal Highway Administration (FHWA) and Federal Transit Administration (FTA) are working together to promote safer routes to transit and help local policymakers better connect their communities through Complete Streets.

Many Federal-Aid Highway Programs support bicycle lanes, better pedestrian walkways, trails, lighting, and other projects that enhance safety. However, some State Departments of Transportation (DOTs), cities, and Tribes may not use these funds for small-scale safety and access improvements due to processes and requirements more suitable to large-scale highway projects.

Transferring, or flexing, funds from Federal Highway programs to the Federal Transit program facilitates federal investments at the local level for measures that improve access, particularly for underserved groups. (See FAQs for the full list of eligible activities and FTA’s flex funding page for additional uses).

Transit agencies across the U.S. are facing a period of dire financial crisis due to the lingering impacts of the COVID-19 pandemic on ridership levels. The projected revenue deficits may require agencies to make severe service and operational cuts in the coming years. Agencies must identify alternative funding sources to continue providing essential, safe, reliable, and frequent transit services. Flexing funds can help agencies adapt to financial constraints by leveraging Federal-Aid Highway Program funds to enhance transit access and operation. For example, regions can transfer funds for rolling stock purchases, upgrading transit stations, or use the program to help free up transit agencies’ budgets for operating costs. Flex funding can also provide some operating assistance through eligible programs like CMAQ or the new Carbon Reduction Program.

This site provides resources for project sponsors, localities, regions, State DOTs, and transit providers to understand how to use the flex funding provision for simplified and lower cost project delivery.

If you have additional questions, please contact flexfunds@dot.gov.

Is flex funding a unique source of money for projects?

No, flex funding is not a unique funding stream; rather, it is an option that can be exercised with many federal formula funding programs. Federal law (23 U.S.C. § 104(f); 49 U.S.C. § 5334(i)(1)) allows Federal-Aid Highway Program funding, administered by FHWA and apportioned to State DOTs, to be flexed (or transferred) to be administered by FTA for public transportation projects, including projects that enhance transit or access to transit. These associated transit improvements must be physically or functionally related to transit facilities. Eligible projects are:

  • historic preservation, rehabilitation, and operation of historic public transportation buildings, structures, and facilities (including historic bus and railroad facilities) intended for use in public transportation service;
  • bus shelters;
  • functional landscaping and streetscaping, including benches, trash receptacles, and street lights;
  • pedestrian access and walkways;
  • bicycle access, including bicycle storage shelters and parking facilities and the installation of equipment for transporting bicycles on public transportation vehicles;
  • signage; or
  • enhanced access for persons with disabilities to public transportation.

States can use CMAQ funds apportioned under 23 U.S.C. 104(b)(2) for public transportation projects that are likely to result in emissions reductions. Eligible projects include:

  • public transportation vehicle acquisitions;
  • construction of new facilities or improvements to facilities that increase transit capacity; and
  • mobility improvements resulting from the provision of transit traveler information.
Which funds can be transferred (or flexed)?

Several Federal-aid Highway Programs are eligible to be used for pedestrian, bicycle, and transit projects—including projects that enhance transit users’ experiences, such as bus stop lighting and shelters—and can be flexed. While most funds allocated to the State DOTs through these programs can be flexed, urbanized area sub-allocated funds—funds that are directed to Metropolitan Planning Organizations (MPOs)—most commonly fund “associated transit improvements” such as sidewalks, bicycle lanes, and transit stop enhancements.

What types of projects are eligible to flex funds?

Many State DOTs and regions are familiar with flexing FHWA funds directly to FTA for projects such as bus stop improvements or to purchase buses or other rolling stock. However, FHWA funds can also be flexed to FTA for projects that enhance transit or access to transit. According to FTA’s 2011 policy statement, any pedestrian improvement within half a mile of a transit station or stop and any bicycle improvement within three miles of a transit station or stop improves access to transit and is therefore “physically or functionally related to transit.” Pedestrian or bicycle improvements beyond these distances may also be eligible if a project sponsor can demonstrate the improvement is within the distance that people will travel by foot or bicycle to a transit stop or station.

In addition to improving transit access and utility, many of the infrastructure projects that are eligible for flexing (e.g., sidewalks, bike lanes, and high-visibility crossings) are proven safety countermeasures. Such projects may include small-scale improvements like ADA-compliant curb cuts, street furnishings like benches, or mobility hubs for bicycle sharing; or larger-scale infrastructure projects such as pedestrian and bicycle overpasses and off-road trails. It is important to note that while bicycle infrastructure like racks, corrals, and bikeshare stations are eligible projects for flex funding, funding for shared bicycles or micromobility devices like e-scooters are not eligible under federal transit law.

The FHWA Center for Innovative Finance Support provides a webpage detailing the FHWA and FTA funds that may be used for either highway or transit purposes. Also refer to FHWA’s Pedestrian and Bicycle Funding Opportunities webpage for more examples of bicycle and pedestrian projects that are eligible under Federal-aid Highway Program funding sources and that may be eligible to flex to FTA as “associated transit improvements.” U.S. DOT has gathered several examples of projects that exercised the option to flex FHWA funding to FTA.

Why flex funds?

Exercising the ability to flex funds can provide many advantages:

  • Promote greater coordination between transit agencies, regions, and municipalities in network design and project planning.
  • Encourage a more integrated, network-based approach to local and regional mobility.
  • Reduce the project management burden on State DOTs, particularly for numerous small, distributed projects.
  • Increase local control and improve context-sensitive design.
  • Reduce pre-construction design costs.
  • Accelerate project delivery, especially for smaller infrastructure improvements.
  • Remove barriers to using Federal-Aid Highway Program funds for pedestrian, bicycle, and transit projects and low-cost, distributed safety projects.
  • Leverage Federal-Aid Highway Program funds to enhance transit access and operation.
  • Improve the safety and accessibility of the transit network.

In general, flexing funds from FHWA to FTA can simplify and expedite the delivery of some projects. This approach has the potential to save time and money in project design and delivery—particularly for small-scale, low-cost transit access improvements that are proven safety countermeasures like sidewalks, bicycle lanes, and high-visibility crosswalk enhancements.

Who is involved in the flex funding process?

Flexing funds requires the cooperation and commitment of many partners. A project must first be selected for funding and adopted into the Metropolitan Transportation Improvement Program (TIP) and Statewide Transportation Improvement Program (STIP) before any party can initiate the process to flex funds.

Central to the process are the State DOT (the principal grantee for FHWA funds) and the recipient of FTA funds (typically a provider of public transportation services but may be an MPO or other entity eligible under the applicable Chapter 53 program).

The formal process for flexing funds begins when the State DOT sends a written request to FHWA; however, local advocates and/or project sponsors often need to approach the State DOT and MPO to make this request. At the same time, the FTA recipient must agree to accept the funds and either implement the project directly or enter into an agreement with an eligible subrecipient who will undertake the project. After these steps, an FTA regional office will review and confirm the eligibility of the project and the appropriateness of the transfer and facilitate the transfer.

The process works best when project sponsors, FTA recipients, and State DOTs work together from the beginning, starting with project identification; however, project sponsors can convene all stakeholders after a project has been selected for funding to discuss how project delivery would benefit from flexing funds.

How far along can/must a project be to flex funds?

Ideally, localities, transit providers, MPOs, and State DOTs work together at the beginning to plan multimodal networks and prioritize and program projects, with agreement as to whether a project should request to flex funding to FTA or remain with FHWA.

It is possible, however, that project sponsors (cities, counties, transit agencies, etc.) independently submit projects to a competitive call for projects issued by their MPO and, once selected for funding, determine that flexing funds would be the best option for project delivery. In these cases, the project sponsor should immediately coordinate with the relevant FTA recipient to obtain agreement that the project could best be implemented by flexing funds. If the FTA recipient and project sponsor agree that funds should be flexed, then both parties should approach the State DOT and MPO to begin the process to transfer funds to FTA.

Projects can request to flex funding at the planning, design, construction, or operation stage(s) of the process, even if an earlier phase did not involve the flexing of funds. It should be noted, however, that once funds are obligated for a certain phase and scope of the project, it may no longer be possible to flex funds for that phase.

How long does it take to flex funds?

One of the main benefits of flexing funds is the possibility of a faster timeline for delivery of projects that support access to transit. The funding transfer process involves several steps and requires action from multiple parties. The process itself, however, is relatively simple and straightforward.

From the time the State DOT sends a written request to FHWA to flex funds to FTA, it is estimated that it takes approximately three months to review, approve and complete the transfer process. During this time, design and/or pre-construction activities can continue with previously awarded Federal-aid or local funding.

When funds are flexed to FTA, can the FTA direct recipient enter an agreement with a subrecipient for project construction?

Yes. When funds are flexed to FTA, they will be awarded to a current FTA recipient—typically, a local transit provider. The FTA direct recipient (grantee) may directly implement the project or provide the funds to an eligible subrecipient to implement the project. In either case, the direct recipient is responsible for ensuring all federal requirements of an FTA project are met.

It may be advantageous for the direct recipient to construct the project in communities with limited capacity to manage and implement capital construction projects. Regional transit agencies may also be better positioned to deliver safety or access projects that are widely distributed in different jurisdictions across a region. Delivery by local project sponsors may be the best approach when they have appropriate resources and are better suited to deliver and manage projects within the local transportation network.

Does flexing funds change the local match requirement or any other Federal-aid requirements?

No. The local match requirement for a project is tied to the original funding program, even after funds are transferred. Every project utilizing Federal-aid funding must adhere to statutory federal requirements. Once funds are transferred from FHWA to FTA, however, projects will be under the direct control of and will follow the project delivery reviews and processes unique to FTA.

How do I start the process to flex funding?

See the Flex Funding Process Flow Chart. Project sponsors are encouraged to begin the process by engaging stakeholders, which include the transit agency (if the project sponsor is an entity other than the transit agency) or any relevant local agencies (if the project sponsor is a transit agency), the State DOT, FHWA Division Office and FTA Regional Office. Beginning conversations and gaining buy-in from stakeholders about pursuing flexible funding for associated transit improvement projects as early as possible will help ensure a smooth, efficient, and coordinated process and allow time to build partnerships for better project delivery. If the project has already been programmed and stakeholders are on board, follow the steps in the flow chart to initiate the formal flex fund transfer process.

If you have additional questions, please contact flexfunds@dot.gov.

Eligible Programs to be flexed to FTA
Carbon Reduction Program ✔
Congestion Mitigation and Air Quality Improvement (CMAQ) ✔
Federal Lands Highways Program ✔
Ferry Boat Program ✔
Highway Safety Improvement Program (HSIP)* ✔
National Highway Performance Program (NHPP) ✔
PROTECT Formula Program ✔
Surface Transportation Block Grants (STBG) ✔
Transportation Alternatives (TA) ✔

*Must first be transferred to another 23 U.S.C. program that has transit eligibility before the funds may be transferred to FTA.

A complex flow chart. See long description for full alt text.

See full description of figure here.

The transfer request uses FHWA Form 1575. For further details, use this detailed flow chart.

Milford Rail Station Bike Lockers – Milford, CT

The Milford Transit District (MTD) worked with the City of Milford to install 25 bike lockers at the Milford train station. The station largely serves riders commuting to New York City, and there was interest in the community for longer term, secure bike parking given the long hours for bicycle commuters. Adding more bike parking also fit into larger community plans to increase access to and encourage development around transit. Before March 2020, the lockers were well used, and MTD expects that as commuter activity returns, the lockers will gain more usage.

The City applied for CMAQ funds for the bike lockers, and once approved by the MPO, the Connecticut DOT suggested the funding transfer. Given the project’s nexus with transit and that the lockers are installed on the station site, they contact MTD to complete the funding transfer.

Total cost: $70,000 – 80% CMAQ, 20% local

The image displays two domed blue bike lockers located at the Milford train station.

(Source: Milford Transit District)

Montague Pedestrian Overcrossing – Milpitas, CA

The Santa Clara Valley Transportation Authority (VTA) worked with the Santa Clara County and City of Milpitas to construct a pedestrian overpass across the Montague Expressway, connecting a high-density residential and commercial area with the new Bay Area Rapid Transit (BART) station in Milpitas. The City owns, operates, and maintains the overcrossing, which provides critical access to the station.

VTA applied to its MPO (on behalf of the City) for CMAQ funding for design and construction for the project and transferred funding to FTA. Transferring the funds allowed for a more flexible and streamlined process; keeping the funding with FHWA would have required the project to follow some processes required by Caltrans that were not applicable to the project, including applying state highway and National Highway System standards when the bridge is over a local highway. Transferring the funds also allowed the project to move forward on a faster timeline, which was necessary to use the funding, but would have been difficult to adhere to given Caltrans capacity at the time to oversee the project. VTA hired a contractor to oversee the project, which followed all federal and local protocols and standards.

Total cost: $21.7M – 49% federal (mostly CMAQ), 16% state, 35% city

The image displays a person at a podium speaking to an audience for the Montague Pedestrian Overcrossing opening. The elevated pedestrian overcrossing is displayed behind the man at the podium.

(Source: Santa Clara Valley Transportation Authority)

Bissonnet Pedestrian-Transit Improvements – Houston, TX

The Upper Kirby Management District & Upper Kirby Redevelopment Authority in Houston, TX applied for and received funding for streetscape improvements along a half-mile corridor served by and intersecting multiple fixed-route Houston METRO bus lines. The project included constructing and improving sidewalks, ADA-compliant ramps, crosswalks, pedestrian signals, functional landscaping, and transit-related street furniture.

Transferring funds to FTA allowed the Upper Kirby Management District to implement the project consistent with local design and project delivery processes, while still following all federal requirements related to civil rights, procurement, etc. Managing the project locally led to overall cost and schedule savings compared to going through the full State DOT process, which would have required design standards and processes including detailed environmental analysis that were developed for highway projects.

Total cost: $8M – 23% federal (STBG), 77% local

The image displays a two-lane road and sidewalk with streetscape features including small trees and streetlights, benches, garbage cans, and landscaping in Houston, Texas.

(Source: The Goodman Corporation)

Transfer Request Form

The transfer request uses FHWA Form 1575.

Legal Framework for Flexible Funding

  1. Federal stature providing the basis for flexible funding.
  2. Legal Definitions.
  3. FHWA directive that implements the statutory provisions associated with the transfer of highway and transit funds and the transfer of funds among States or to the Federal Highway Administration (FHWA). It also clarifies various authorities and administrative procedures associated with transferring funds to other agencies.
    • FHWA Order 4551.1: Fund Transfers to Other Agencies and Among Title 23 Programs (2013)
  4. FTA circular which is a re-issuance of guidance on the administration and preparation of grant applications for the Urbanized Area Formula Program under 49 U.S.C. 5307. This revision incorporates provisions of the Moving Ahead for Progress in the 21st Century Act (MAP-21; Pub. L. 112-141 (2012)), and includes the most current available guidance as of the date of publication.
  5. FTA formal policy on the eligibility of pedestrian and bicycle improvements for FTA funding. Defines the catchment area for pedestrians and bicyclists in relation to public transportation stops and stations.
  6. Fact sheets with key information on the Bipartisan Infrastructure Law’s highway provisions. Each relevant fact sheet has a section entitled, “Transferability to and from Other Federal-aid Apportioned Programs,” which details the percentage of funding that can be transferred and into which programs the funding could be transferred.

Federal Resources

FTA Flexible Funding for Transit and Highway Improvements
FTA resource explaining the transfer process and providing examples of Federal-Aid Highway Program funding that can be flexed to FTA for public transportation projects.

FHWA Pedestrian and Bicycle Funding Opportunities
Table indicating potential eligibility for pedestrian and bicycle projects under U.S. Department of Transportation surface transportation funding programs. This source could be helpful to agencies with a planned multimodal transit access project to understand potential funding sources and to develop a strategy for flexing funds from FHWA to FTA to fund specific aspects of that project. Not all activity or project types on the table can be flexed.

FHWA Proven Safety Countermeasures
FHWA’s Proven Safety Countermeasures initiative (PSCi) is a collection of 28 countermeasures and strategies effective in reducing roadway fatalities and serious injuries on our Nation’s highways. It includes bicyclist and pedestrian improvements, which are examples of how flexed funds can be used to promote safer routes to transit for non-motorized users.

FTA Dear Colleague letter: Local Match Waiver for Complete Streets
The Dear Colleague letter informs states and metropolitan planning organizations that FTA has approved a waiver of the non-federal match for the Metropolitan Planning Program and the State Planning and Research Program for Complete Streets planning activities. Many Complete Streets projects would also be considered access to transit projects and are eligible for flex funding.

GAO: Flexible Funding Continues to Play a Role in Supporting State and Local Transportation Priorities
This U.S. Government Accountability Office Report examines the extent to which states have transferred flexible funding between highway and transit programs since 2007 and the factors that affected the decisions of selected states and urbanized areas to transfer flexible funding and the outcomes of those decisions.

Webinars and Presentations

FTA/FHWA Flex Funding for Transit Access Presentation (FTA, 2022)
Presentation providing an overview of Flexible Funding, including eligibility, requirements, key players, process, and options for project delivery.

Federal Funding Flexibility: Use of Federal Highway Fund Transfers by State DOT (National Cooperative Highway Research Program (NCHRP), 2022)
Webinar documenting the objectives, approach, and key findings and conclusions of research the transfer authority under the 2012 MAP-21 program and the 2015 FAST Act, historical trends of funding transfers by state, considerations that drive transfer decisions; trade-offs, barriers, and opportunities for states and MPOs concerning the authority to transfer funds. This webinar is accompanied by the report linked in the research report section of this webpage.

Research Reports

Federal Funding Flexibility: Use of Federal Highway Fund Transfers by State DOT (National Cooperative Highway Research Program (NCHRP), 2022)
Report documenting the objectives, approach, and key findings and conclusions of research the transfer authority under the 2012 MAP-21 program and the 2015 FAST Act, historical trends of funding transfers by state, considerations that drive transfer decisions; trade-offs, barriers, and opportunities for states and MPOs concerning the authority to transfer funds. This report is accompanied the webinar linked in the webinar section of this webpage.

New TRB Report Analyzes “Flex” Transfers of Federal Highway Aid, Eno Transportation Weekly, Jeff Davis, 2022
Report providing a summary of the 2022 NCHRP Report, Federal Funding Flexibility: Use of Federal Aid Highway Fund Transfers by State DOTs, and additional analysis on states’ FAST Act highway formula funding that was apportioned via the CMAQ program.

First Mile, Last Mile: How Federal Transit funds can improve access to transit for people who walk and bike, Advocacy Advance (2014)
Report documenting how biking and walking can be integrated with transit and the federal transit funds that can support projects and programs to increase accessibility among people who bike, walk, and take transit.

Use of Flexible Funds for Transfer Under ISTEA and TEA-21, Transportation Research Board (2002)
Report providing information on flexible funding history, programs, case studies, and provisions and requirements that govern the use of flexible funding.

Flexible Funding For Transit: Who Uses It? (Robert Puentes, The Brookings Institution, 2000)
Report providing a snapshot of the extent to which flexible funding is used.

Department of Transportation: Flexible Funding Within Federal Highway Programs (U.S. Government Accountability Office, 1997)
Report describing the extent to which the states have used flexible funding.

If you have questions, please contact flexfunds@dot.gov.