SUBJECT:
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Approval of a resolution authorizing the President & CEO, or her designee, to finalize and execute a Memorandum of Understanding with the City of Round Rock authorizing Round Rock to be a Direct Recipient of a suballocation of the Austin Urbanized Area’s FY2027 and FY2028 Federal Section 5307 and 5339(a) funds.
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FISCAL IMPACT:
This action has no fiscal impact.
STRATEGIC PLAN:
Strategic Goal Alignment:
☐ 1. Customer ☒ 2. Community
☐ 3. Workforce ☐ 4. Organizational Effectiveness
EXPLANATION OF STRATEGIC ALIGNMENT: CapMetro coordinates with non-members in the Austin urbanized area to meet transit needs in their communities and build a regional system. These efforts will result in a more robust transit network that can eventually be brought together through regional planning efforts.
BUSINESS CASE: As the Designated Recipient of the Urbanized Area Formula Grants Program (Section 5307) and Formula Grants for Buses and Bus Facilities Program (Section 5339(a)), CapMetro is responsible for administering and apportioning the federal funds within the Austin urbanized area (UZA), which extends beyond CapMetro’s service area. CapMetro’s goal is to collaborate with non-member communities in the UZA to meet their transit needs now and in the future. By receiving a suballocation of Section 5307 and 5339(a) funding, the City of Round Rock will be able to continue its on-demand service and fixed-route service, plan for future transit needs, and fund its bus and bus facility needs.
COMMITTEE RECOMMENDATION: The item was presented and recommended for approval by the Finance, Audit and Administration Committee on May 6, 2026.
EXECUTIVE SUMMARY: CapMetro is the Designated Recipient of Federal Section 5307 and 5339(a) funds for the Austin urbanized area (UZA). Per Federal Transit Administration (FTA) guidelines, Section 5307 funds can be used for transit capital and operating assistance in urbanized areas and transportation planning, and 5339(a) funds can be used to replace, rehabilitate and purchase buses and related equipment and to construct bus-related facilities. Prior to FY2013, CapMetro subawarded a portion of Section 5307 funds to Round Rock and administered the funds as part of a pass-through arrangement outlined in an interlocal agreement (ILA). The FY2011 and FY2012 ILA that authorized this arrangement was not renewed, and Round Rock elected to become a Direct Recipient so it could apply for and receive a suballocation of the formula program funds directly from FTA.
In FY2013, an agreement was signed for FY2013 and FY2014 Section 5307 funds to be suballocated to Round Rock to apply for as a Direct Recipient. This agreement has been renewed on a biennial basis since that time. The FY2025 and FY2026 agreement also included a suballocation of Section 5339(a) funds.
The FY2027 and FY2028 Memorandum of Understanding (MOU) with the City of Round Rock will permit Round Rock to apply for its suballocation of the UZA’s FY2027 and FY2028 Section 5307 and 5339(a) funds. CapMetro is not required to provide technical support or assistance beyond any that may be required by the FTA when a Designated Recipient authorizes another public entity to be a Direct Recipient.
The suballocation of any 5307 and 5339(a) funds to Round Rock will be contingent upon the apportionment of 5307 and 5339(a) funds to the UZA. If the FTA does not apportion or distribute 5307 and 5339(a) funds to the UZA, Round Rock would not be eligible to receive a suballocation of 5307 or 5339(a) funds as a Direct Recipient. If the FTA reduces the amount of 5307 or 5339(a) funds available to the UZA, Round Rock’s share of funding would be based upon the reduced amount.
These terms are included in the attached MOU between CapMetro and Round Rock. The MOU expires on September 30, 2028, and applies only to Section 5307 and Section 5339(a) funds apportioned in FY2027 and FY2028.
SBE PARTICIPATION: Does not apply.
PROCUREMENT: Does not apply.
RESPONSIBLE DEPARTMENT: Finance
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RESOLUTION
OF THE
CAPITAL METROPOLITAN TRANSPORTATION AUTHORITY
BOARD OF DIRECTORS
STATE OF TEXAS
COUNTY OF TRAVIS
AI-2026-1807
WHEREAS, Capital Metropolitan Transportation Authority is the Designated Recipient of the Urbanized Area Formula Grant (Section 5307) and the Formula Grants for Buses and Bus Facilities Program (Section 5339(a)) funds apportioned by the Federal Transit Administration for the Austin urbanized area (UZA); and
WHEREAS, the City of Round Rock is a local government that operates fixed route bus service in the Austin UZA, and is seeking a suballocation of Section 5307 and Section 5339(a) funds in order to support the planning, capital development and operation of transit services for the Round Rock community, including demand response bus service, express bus service and reverse commute bus service.
NOW, THEREFORE, BE IT RESOLVED by the Capital Metropolitan Transportation Authority Board of Directors that the President & CEO, or their designee, is authorized to finalize and execute a Memorandum of Understanding with the City of Round Rock that authorizes Round Rock to continue to be a Direct Recipient of its suballocation of the Austin UZA’s FY2027 and FY2028 Federal Section 5307 and Section 5339(a) funds.
____________________ Date: ____________________
Secretary of the Board
Becki Ross