The Agreement:

The U.S. Department of Transportation (USDOT) has awarded $354.5 million through its Urban Partnership Agreement (UPA) to New York to implement the Mayor’s congestion pricing program (or an alternative plan approved by USDOT as described below). The funds have been awarded jointly to the New York City Department of Transportation (NYCDOT), the New York Metropolitan Transportation Authority (MTA) and the New York State Department of Transportation (NYSDOT).

The Funding:

The $354.5 million supports the implementation of the Mayor’s congestion pricing program and a series of projects to better serve New Yorkers with public transit. The funding is programmed as follows:

• $10.4 million to implement congestion pricing – These funds are dedicated to beginning congestion pricing south of 86th street, with a requirement to reduce vehicle miles traveled (VMT) in the congestion pricing zone by 6.3%, which is achieved in the Mayor’s plan. The City is also committed to provide $112.7 million for technology acquisition, matching the USDOT’s spending on bus rapid transit (described below).
• $213.6 million for bus facilities and other improvements – The grant will pay for the construction of the Jamaica and Charleston Annex bus depots. The MTA will purchase up to 367 new buses with funds already budgeted for the construction of the depots – as proposed in the UPA application to meet procurement regulations. In addition, the grant also pays for: constructing a bus lay-up facility, upgrading park-n-ride locations, improving pedestrian walkways to and from stations; and providing new technology at 223 intersections to better manage traffic flow. NYCDOT will construct an East River bus lane to decrease travel times.
• $112.7 million to begin Bus Rapid Transit (BRT) – A high speed BRT system will be developed in New York City. PlaNYC calls for BRT to begin in all five boroughs along major transit corridors which lack subway service.
• $15.8 million for regional ferry service – Ferry service improvements will connect developing neighborhoods in Brooklyn and Queens with Midtown and Lower Manhattan.
• $2 million for research – To support the West of Hudson Regional Transportation Alternatives Analysis/DEIS.

The Conditions:

The funding from the USDOT is conditioned on actions by the New York State Legislature and the New York City Council. Congestion pricing must be approved within 90 days of the opening of the next session of the New York State Legislature, allowing congestion pricing to begin no later than March 31, 2009. If the State Legislature implements a plan which is different than the Mayor’s, in order to access the funds, the plan must:

• Reduce Vehicle Miles Traveled (VMT) in the congested zone by at least 6.3%;
• Use pricing as the principal mechanism to achieve this reduction;
• Provide for at least 18 months of congestion pricing operation;
• Provide enough bus service as called for by USDOT to meet the mobility needs of New York City;
• Meets the authorization deadline of no later than 90 days after the opening of the next session of the New York State Legislature;
• Meets the implementation deadline of March 31, 2009;
• Spends as much on pricing implementation technology as is provided by USDOT for BRT implementation.
• Be approved by the USDOT.

The Penalty:

The conditions in the grant come with limitations and severe penalties:

• Neither the NYCDOT, MTA nor NYSDOT can access the transit funds until a congestion pricing plan meeting the USDOT’s standards is authorized;
• Failure to meet the VMT-reduction goals, implementation deadlines and all other conditions stipulated in the USDOT grant will lead to a forfeiture of the grant.